DOE Update: Reliability and Grid Modernization. Caitlin Callaghan, National Electricity Delivery Division

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1 DOE Update: Reliability and Grid Modernization Caitlin Callaghan, National Electricity Delivery Division May 25, 2016

2 DOE Acronyms/Abbreviations OE QER GMI GMLC GridMod QTR MYPP DER EPTA TA Office of Electricity Delivery and Energy Reliability Quadrennial Energy Review 1.1 First Installment 1.2 Second Installment Grid Modernization Initiative Grid Modernization Laboratory Consortium Grid Modernization Quadrennial Technology Review Multi-Year Program Plan Distributed Energy Resources Electricity Policy Technical Assistance (Program) Technical Assistance 2

3 DOE Update Quadrennial Energy Review Second Installment Grid Modernization Laboratory Consortium DOE Funding Electricity Policy Technical Assistance 3

4 Quadrennial Energy Review 1.2 An Integrated Study of the Electricity System The second installment of the QER will conduct a comprehensive review of the nation s electricity system, from generation to end use, including a more comprehensive look at electricity transmission, storage, and distribution infrastructure covered in installment one. 4

5 QER 1.2: Electricity Generation to End Use QER 1.1 documented major transformation of Electricity Sector: Changing generation mix Low load growth Increasing vulnerability to severe weather/climate New technologies, services and market entrants Cyber/physical threats Aging infrastructure and workforce Growing overlap between jurisdictions Given the centrality of electricity to the Nation, this transformation merits a closer examination in the next installment of the QER. QER Secretariat 5

6 Linking QER 1.1 and 1.2 QER 1.1 Fuels Waste QER 1.2 QER Secretariat

7 The QER Lens QER 1.2 will analyze how the electric power system as a whole is evolving, including: Integrating new technologies Changing market conditions Grid operations Financing and valuing Changing role of the customer Physical structures and the roles of a range of actors, institutions and industries are being analyzed, vis-à-vis: Maintaining reliability of supply Ensuring electricity affordability Adapting to dramatic changes in technology and services QER analyses are underway to consider issues such as: Fuel choice Distributed and centralized generation Physical and cyber vulnerabilities Federal, state, and local policy direction Expectations of residential and commercial consumers Reviewing existing and evolving business models for a range of entities, throughout the system QER Secretariat 7

8 Sub-Set of Issues We Anticipate Addressing I. Electricity consumption and energy efficiency by sector (residential, commercial, industrial, transportation) status, trends and barriers. What levels and patterns of electricity consumption exist today and are forecasted for 2040 in the industrial, commercial, residential and transportation sectors? What business models and methods of customer engagement have been most successful, or show the most promise, for deploying residential efficiency measures? What is the role of policy in facilitating these models and methods? II. III. Distributed energy resources (DER): demand response, distributed generation and distributed energy storage. How should DER value streams be assessed from different perspectives customer, utility and society? What are the major barriers to distributed generation deployment, including financial, technical, transactional and distribution system limitations? What policies and regulations enable demand response to support variable energy resources at utility scale? Grid Operations and Planning How do different system architectures facilitate or inhibit efficient grid evolution? What lessons from international experiences with grids operating at high penetration levels of variable energy resources can be translated to U.S. system operations? What are the implications of having a hybrid generation system a mix of centralized and distributed resources on the grid? Predecisional Not for Distribution 8

9 Sub-Set of Issues We Anticipate Addressing IV. Generation Portfolio, Reliability, Supply Chains, and Equity What is the evolution of the generation portfolio? What are our reserve margins? What is the availability and need for backup power? What policies can be put in place to increase access to rural, low-income communities, and remote communities? V. Electricity Markets What frameworks and metrics can characterize regional markets and degree of market regulation? How have markets performed across different criteria since restructuring? How can policy levers be employed to remove barriers in each type of market to facilitate policy goals? Are there barriers to cleaner and more efficient generation given cost of capital differences? VI. Electricity Finance How sensitive are costs to inputs (commodity prices, construction costs, technology costs)? How do costs change under alternate financial scenarios (interest/debt/capital)? What are the end user cost distributions under alternate DG/centralized scenarios? VII. Electricity Valuation How are uncertainty and risk taken into account under electricity valuation practices? What value streams do electricity technologies provide to the system that are or are not monetized (and to which stakeholders do they accrue)? Do grid operators and policymakers manage tradeoffs among value streams? 5/31/2016 QER Secretariat 9

10 Sub-Set of Issues We Anticipate Addressing VIII.Innovation and Technology What are the government, industry, and investor roles across the clean energy innovation spectrum? How has technology innovation enabled policy changes (e.g. FERC rules)? What level of innovation is required to prudently ensure availability of clean energy capabilities to meet our 2030 and 2050 goals, focusing on the electricity sector, e.g. baseload, storage? IX. Jurisdiction and Regulations How did existing jurisdictional boundaries and policies evolve? What are the authorities for oversight of the electricity system? What are the responsibilities vested at each level? What policy levers that exist at each level? Distribution-level planning is becoming increasingly important, DER requires utility planners to achieve better integration of transmission planning and distribution planning and coordination between the Feds and the states. How do wholesale and retail markets complement each other (from a jurisdictional perspective)? X. Environment What are potential generation pathways for meeting the U.S. goals for economy-wide de-carbonization by 2050 and how to plan for a future that achieves deep decarbonization of the energy sector? How do the interconnected flows of energy and water compare across states? How are these changing over time? What are the key environmental justice issues that are related to the electric power sector and what policy measures should be taken to minimize impacts to EJ communities? What are the key environmental issues that arise in the context of electric infrastructure siting and what policy measures should be taken to minimize these impacts? 5/31/2016 QER Secretariat 10

11 Sub-Set of Issues We Anticipate Addressing XI. Resilience What strategies and methods are available to improve the resilience of the electricity system, and how do alternative approaches compare on benefits, costs, and performance? How can system resilience be maintained in the face of evolving trends and changing conditions, i.e., increased consumer choice, DER, smart grids, climate change, regional migration, fuel diversity? What is the role of the insurance industry? XII. Security (Physical/Cyber) What are the key threats, vulnerabilities, risks and consequences associated with cyber and physical attacks on electricity systems, especially SCADA and ICS? How can we address the threat of EMPs to the grid? Have system owners and operators incorporated physical security measures in response to terrorist attacks? How do utilities view cyber threats, e.g. in response to NIST s framework and NERC s cybersecurity standards? As the economy is increasingly electrified (including DER), do cyber and physical vulnerabilities change? XI. North American Integration Are there barriers or constraints for continuing integration with Canada s electricity sector? How will new transmission be handled? Mexico s electricity sector is less extensively integrated with the United States. Integration is not a current reality, but an objective. How does an analysis of the Canadian border inform policies with Mexico? For Canadian hydropower to backstop U.S. electricity, what are the constraints and opportunities? XIV.Employment and Workforce Development What are workforce skills and requirements in context of evolving technology and the environment 5/31/2016 QER Secretariat 11

12 Grid Modernization Laboratory Consortium 12

13 Grid Modernization Initiative The vision of DOE s Grid Modernization Initiative (GMI) is: A future grid that will solve the challenges of seamlessly integrating conventional and renewable sources, storage, and central and distributed generation. The future grid as a critical platform for U.S. prosperity, competitiveness, and innovation in a global clean energy economy. A future grid that will deliver resilient, reliable, flexible, secure, sustainable, and affordable electricity to consumers where they want it, when they want it, how they want it. 13

14 Connectivity to Other DOE Activities QER Policy Options QTR Technology Options Stakeholder Inputs 60+ Workshops and Peer Reviews since 2012 DOE Grid Modernization Multi-Year Program Plan Design and Planning Tools Sensing and Measurement System Control and Operations Devices and Integrated Systems Security and Resilience Institutional Support Integrated Lab Call Grid Modernization Lab Consortia (GMLC) Industry and Academic Solicitations HQ Program Offices Cooperative Research Agreements HQ Program Offices Technical Assistance HQ Program Offices and National Labs 14

15 GMLC Portfolio: 88 Projects, $220 Million, 3 years Multi-year Program Plan Devices and Integrated Systems Sensing and Measurement System Operations and Control Design and Planning Tools Security and Resilience Institutional Support Topical Areas for Regional and State Partnerships Distributed Energy Resources (DER) Resilience Grid Architecture For project-level information, go to: 15

16 GMI s Integrated Technical Thrusts Institutional Support Provide tools and data that enable more informed decisions and reduce risks on key issues that influence the future of the electric grid/power sector Technology Innovation Design and Planning Tools System Operations, Power Flow, and Control Sensing and Measurements Devices and Integrated System Testing Security and Resilience Create grid planning tools that integrate transmission and distribution and system dynamics over a variety of time and spatial scales Design and implement a new grid architecture that coordinates and controls millions of devices and integrates with energy management systems Advance low-cost sensors, analytics, and visualizations that enable 100% observability Develop new devices to increase grid services and utilization and validate high levels of variable generation integrated systems at multiple scales Develop advanced security (cyber and physical) solutions and real-time incident response capabilities for emerging technologies and systems 16

17 Core Activities The Foundational Research projects provide the fundamental knowledge, metrics, and tools needed to support all the Cross-Cut R&D and regional partnerships. They provide the framework to enable an integrated DOE grid modernization strategy, including: Metrics and Baseline: fundamental metrics to guide and evaluate national progress in grid modernization; Grid Architecture: future grid and industry design elements to guide consideration of new industry paradigms; Interoperability: standards and protocols for interoperability and testing of all grid devices from high voltage to customer premises; Device Characterization: an integrated testing network that spans the National Labs as well as industry and academia; Valuation: a consensus framework for valuing emergent grid technologies and services; and Sensing Strategy: a strategy for observing and monitoring the future grid system in a way that meets expectations for predictive control, real-time operations and security Sensing & Measurement 1.1 Metrics & Baseline Valuation Grid Architecture Device Characterization Interoperability 17

18 State and Regional Engagement 18

19 List of Projects on State/Regional Map Southeast Regional Consortium Kentucky Industrial Microgrid Analysis and Design for Energy Security and Resiliency Siting and Optimization Tool for California Smart Reconfiguration of Idaho Falls Network Vermont Regional Partnership Enabling Use of Distributed Energy Resources Grid Analysis and Design for Energy and Infrastructure Resiliency for New Orleans Affordable, Clean, Reliable and Scalable Island Power Systems for Rural Alaska Technical Support for the NY Reforming the Energy Vision Initiative Coordinated Grid Support from Inverter-based Resources and Loads Hawaii Eastern and Western Interconnection Seams Study and Optimal HVDC Overlay 19

20 California Distributed Resource Planning Drivers of change Changing Electricity Supply Mix Growing Threats to Resilience and Reliability New Market Opportunities for Consumers Information and Control Technologies Aging Infrastructure Challenge: AB 327 requires the electric utilities in California to file Distribution Resources Plans (DRPs) to identify optimal locations for the deployment of distributed resources Solution from MYPP: Deliver an online open-access integrated distributed resource planning and optimization platform Partners: CA Public Utility Commission Pacific Gas & Electric Southern California Edison NYSERDA Metropolitan Washington Council of Governments Expected impact: Identify meaningful behind-themeter DER adoption patterns, potential microgrid sites and demand-side resources, and evaluate the impacts of high renewable penetration feeders on the distribution and transmission grid 20 Primary Technical Area of MYPP Design and Planning Tools

21 Grid Analysis and Design for Energy and Infrastructure Resiliency for New Orleans Drivers of change Changing Electricity Supply Mix Growing Threats to Resilience and Reliability New Market Opportunities for Consumers Information and Control Technologies Aging Infrastructure Challenge: Coastal cities in the Southeastern United States face a range of severe weather threats, including hurricanes, floods, and tornadoes. These threats can cause significant damage and disruption to cities, including loss of life, business interruptions and economic losses, and failure of critical infrastructure services. Many of these impacts occur because of failures in the electrical power system, so maintaining effective operations of critical systems and services during a major extended power outage is a growing concern to these cities Solution from MYPP: Conduct technical evaluations to assess energy and critical infrastructure vulnerabilities, and to identify cost effective options to improve the resiliency of both the electrical grid infrastructure and the community. Partners: City of New Orleans, Rockefeller Institute, Entergy, US Army Corps of Engineers Areas of MYPP Security and Resilience 21

22 Office of Electricity Electricity Policy Technical Assistance Program 22

23 Office of Electricity Delivery & Energy Reliability Our Mission OE drives electric grid modernization and resiliency in the energy infrastructure. OE leads the Department of Energy s efforts to ensure a resilient, reliable, and flexible electricity system. OE accomplishes this mission through research, partnerships, facilitation, modeling and analytics, and emergency preparedness. Office of the Assistant Secretary Power Systems Engineering R&D (PSER&D) National Electricity Delivery (NED) Infrastructure Security and Energy Restoration (ISER) 23

24 OE Electricity Policy Technical Assistance Program TA Topics Quick Links Utility Business Models Ratepayer-Funded Energy Efficiency Demand Response Recovery Act Assistance Uniform Methods Project Contacts Caitlin Callaghan Larry Mansueti

25 OE Electricity Policy Technical Assistance Program Types of Assistance Analysis assistance consisting of data collection and assessment activities to determine impacts and evaluate policy options and technology and market strategies Stakeholder-Convened Discussions by organizing task forces, working groups, and collaborative processes to tackle key issues and build consensus for preferred courses of action Education and Training through workshops and webinars to raise knowledge levels and better equip policy makers to address local and regional needs Consultations for quick-turnaround assignments involving technical experts advising policy makers on specific matters of interest 25 25

26 How Eligible Entities and Organizations Get Assistance Program Execution HOW TO GET ASSISTANCE TA generally provided in response to requests from eligible entities Requests for assistance can be submitted - directly to the OE program contacts - through a national laboratory - through a national or regional organization TA is provided as appropriate and based on available resources - existing resources leveraged, if possible - similar requests may be aggregated for economic/efficiency reasons - other DOE program offices may be engaged to address relevant subject matter ELIGIBLE ENTITIES State public utility commissions State legislatures National associations of state decisionmakers Regional associations of state decision-makers Federal officials Governors' offices State energy offices Governing boards of public power and cooperative utilities 26 26

27 Who are the experts? how/where they engage Experts DOE staff National Labs Third-Party Experts (e.g., Regulatory Assistance Project, Clean Energy States Alliance) N-group members Regional Groups (e.g., WGA, MGA, EISPC) Engagement provide information about DOE programs/projects/initiatives relevant to TA request provide expert consultations, analytical support/guidance, develop tools/resources, provide training provides expert consultation (e.g., NY REV), author issue papers/reports (e.g., Future Electric Utility Regulation series), inform identification of research areas/initiatives (LBNL advisory group) participate in document reviews, workshops and other discussions to develop resources (e.g., NARUC committees/ subcommittees) facilitate development of resources and tools (e.g., RAPID toolkit, Energy-Water Decision Support Tool, Energy Zones Mapping Tool) to inform state-based activities 27 27

28 Helping with Energy System Planning Comprehensive Planning Expanded TA Existing State Efforts Leverage ARRA IWTP work Complement Energy Assurance/ Risk efforts Tools/analysis Work across state agencies NASEO E-MAP NY REV MA Grid Mod 28

29 Resource Planning Portal resourceplanning.lbl.gov LBNL s Western Resource Planning Portal will help policymakers, planners, and other stakeholders evaluate regional planning activities and compliance across the WECC footprint. The Resource Planning Portal is a web-based tool that allows users to: Input electric utility planning information in a consistent format Benchmark planning assumptions across jurisdictions Output results in a standardized format for deeper analysis. The Resource Planning Portal currently contains long term planning assumptions for ~40 load serving entities, which represent about 90%of total WECC delivered load

30 Resource Diversity, System Complexity The potential of high penetrations of mixed DERs presents an entirely new problem in control, coordination and valuedetermination within distribution systems Grid Decisions Building Decisions INFO ENERGY $ EV Decisions Storage Decisions Considerations: Structures: electric infrastructure, ICT, control, industry, regulatory Optimization: local & system, centralized & distributed control Convergence: grid/ict/buildings/transportation/city infrastructure Markets: open access networks, platforms 30

31 Eastern Interconnection Energy Zones Mapping Tool ezmt.anl.gov Web-based EZ Mapping tool looks at 9 clean energy resource for development in the East ~1100 registered users Developed by ANL under ARRA for EISPC, but being leveraged more broadly Evaluation of potential transmission facility locations in sensitive areas or resourceconstrained areas 368 Corridor Study Produces user-customized maps of areas that fit the screening factors and criteria for various electrical power generation technologies ANL continues its stakeholder outreach campaign and technical assistance for the EZ Mapping Tool New data layers added as needed/requested (FY14 - national trails, energy-water) Periodic updates of energy policy and law 31 31

32 NASEO Energy Markets and Planning Pilot Project + Energy Markets and Planning (E-MAP) Pilot 32 Energy Market and Planning Pilot (E-MAP) Kick-Off + Phase One Webinar November 14, 2014 Task 1: Research and Policy Analysis (3Q Q 2015) Inform project activities and develop criteria to select candidate states to participate in the pilot Task 2: Selection Process Development (1Q 2015) Scope and develop Request for Commitment seeking two or three state program participants Task 3: E-MAP Pilot State Selection (2Q 2015) Develop outreach materials, establish criteria, work with DOE to define level/type of analytical support available to participants, and notify selected pilot states naseo.org/emap NASEO Energy Markets and Planning Pilot effort takes more holistic approach to addressing changing energy markets, flows, and challenges to deliver greater economic growth, improved environmental quality, and increased energy system resilience Pilot kicked off November 2014; 2-3 year effort 3 state pilots: competitively selected; engage public/private energy leaders and other stakeholders; prepare state energy profiles and needs assessments; identify best practices (roadmap exercise) Develop NASEO toolkit for other states to use in their planning and market/policy designs 32

33 Regulated Utility Business Models FINDER Model: The FINancial impacts of Distributed Energy Resources model quantifies changes in utility costs and revenues with the addition of demand-side and distributed energy resources (DERs) Whitepapers to advance the discussion by examining issues related to incremental and fundamental changes to electric industry regulation and utility business models; current papers underway 1. Electric System Functions and Roles in a High Distributed Energy Resources Future 2. Distribution Systems in a High Distributed Energy Resources Future 3. Performance-Based Regulation in a High DER Future 4. Distribution System Pricing for Distributed Energy Resources 5. Recovery of Utility Fixed Costs: Utility, Consumer, Environmental and Economist Perspectives Technical assistance to state utility commissions and energy offices considering possible changes to regulations and policies to advance public interests in the electricity sector For more information:

34 DOE Update: Reliability and Grid Modernization Caitlin Callaghan

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