The grid will be a key component of the future electric system; it will be the network that serves as the backbone of our electric power system. The electric system is at the heart of our national economy. The grid (the wired network) will be the platform for enabling consumer choice, providing for the public good, and enabling future innovation. It will reliably integrate all energy sources and respond to wide fluctuations in supply from central and distributed generation. The grid will serve as a very dynamic two-way power flow system of the future, ensuring that the system remains stable and resilient.
The electric system of the future will include both central and distributed generation sources with a mix of dispatchable (i.e., controllable) and non-dispatchable resources. While central generation will continue to play a major role, there will also be other generation supply options. The ability of the grid to reliably integrate these new generation options will require it to be more flexible and adaptable. DERs, including photovoltaics, wind, fuel cells, local generation, storage, and demand response, will play a more significant role.
Energy storage will be a key component in future system design, but it will not replace the need for dispatchable generation. The grid operator, as well as microgrid owners/operators, will leverage energy storage along with responsive loads and dispatchable generation sources to optimize operation of the system. Energy storage will allow opportunities for mitigating the variability in non-dispatchable generation sources such as solar photovoltaic and wind generation, as well as provide some additional ancillary services such as spinning reserve requirements.
Consumers will use the grid in different ways. More consumers will become “prosumers”— both consumers and producers of energy. The grid will no longer just be a “delivery pipe” for power. Power will flow both ways, and other ancillary services may also be provided by these new prosumers. Infrastructure and systems to manage this “transactive energy” environment will need to be developed and implemented. Rates and pricing will need to be reformed to ensure fairness to prosumers, traditional energy consumers, and traditional utility suppliers.
Multi-customer and single-customer microgrid operations will complement the future grid.
Microgrids, where feasible or desired, will complement the grid instead of competing with it, providing services to utilities and vice versa. Aggregating distributed generation into microgrids might offer benefits for managing significant concentrations of distributed generation and consumer owned renewables. With accurate market price signals, utilities would be able to call on these microgrids to optimize generation and reduce load on peak demand days or for other operational efficiencies, including reducing the impacts of outages. This could be a win-win with consumers, third-party providers, and utilities working together.
There likely will be a mix of regulated and competitive services. With third-party providers entering the market to offer consumers new services that are not part of regulated pricing or rates, a mixture of regulated and competitive services will emerge. These offerings will need to be unbundled so that the value of the grid can be priced accordingly; grid investments can be appropriately recovered; and third-party providers and consumers can make informed, open-market decisions with that pricing knowledge.
There will be a retail market for services. In order for consumers/prosumers to be active participants, a retail market exchange that supports the true value of renewable energy, traditional energy, capacity, distribution, transmission, aggregation, and other services provided by market participants will develop in some jurisdictions, depending on the market structure and state policies. In addition, locational marginal pricing at the distribution grid level could be one approach to enable the grid operator to optimize grid/system operations and performance.
The system will be even more complex. With all of the new entities and energy resources, managing and optimizing the system will become increasingly challenging, even with all of the new tools and technologies available to grid operators. It is highly likely that the tools and technologies will be deployed ahead of the regulations that will govern their use, which will add to this complexity.