Grid Upgrades Gain Favor to Meet Power Demands of AI, Clean Tech

Power grid technologies have gained momentum in Washington and state capitals in recent weeks as a way to connect more renewable energy and meet rising demand without building as many new transmission lines.

US electric utilities and their state regulators have long overlooked grid-enhancing technologies (GETs) in favor of building new power lines, backers of the technologies say.

New lines come with built in incentives as a major capital investment that earns a guaranteed return approved by regulators, and were seen as less risky than experimenting with a range of new solutions, even if those could save consumers money. But building a new transmission line can take more than a decade, and grid congestion costs raised consumer bills by nearly $21 billion in 2022.

Now, more utilities and states are seeing the urgency to upgrade the nation’s grid to deploy more clean power and meet the unexpectedly fast rollout of artificial intelligence and the electrification of transportation and industry.

“Rising demand is very much pushing the industry to be more creative to get more out of the existing grid,” said Pablo Ruiz, co-founder, CEO, and chief technology officer of NewGrid, a Boston-based firm that monitors and mitigates congestion on power lines. “There are not too many options to increase grid capacity than advanced technologies like GETs, and that’s pushing the industry.”

New Tools

Ruiz and other grid technology developers joined state regulators, utilities, and top energy officials at the White House late last month to discuss ways to work together. They came away with a joint federal-state deployment initiative with 21 states to meet the Biden administration’s goal of upgrading 100,000 miles of existing transmission lines over the next five years.

The White House meeting came two weeks after the Federal Energy Regulatory Commission finalized a major transmission rule requiring regional grid planners to consider the use of certain technologies.

GETs comprise a basket of hardware and software solutions that essentially get more juice out of existing poles and wires. The technologies include sensors, power flow control devices, and analytical tools that maximize the transmission of electricity. A relatively small upfront installation cost can yield staggering savings across the country, according to a steady drumbeat of studies in the last few years.

Three grid technologies would cost about $100 million to install across five states and yield about $1 billion in annual production cost savings, according to an RMI study released in February. The technologies would facilitate 6.6 gigawatts of proposed clean energy projects by 2027 in Illinois, Indiana, Ohio, Pennsylvania, and Virginia, RMI found.

A 2021 Brattle report focused on the Central US found grid-enhancing technologies can double the amount of renewables that can be connected to the grid prior to building new large-scale transmission lines while saving $5 billion in annual energy production costs.

The Biden administration has pledged to leverage tools such as a $10.5 billion grid program established by the bipartisan infrastructure law and low-cost loans from a $250 billion loan program set up by the Inflation Reduction Act to help overcome risk concerns.

State Requirements Rise

There’s no one-size-fits-all grid technology that will apply to every grid problem, and utilities want new technologies to be thoroughly tested, said Maureen Quinlan, senior officer for clean grid and energy for the Pew Charitable Trusts. Plus, the utility business model rewards major capital investments, she said.

“That’s how they make a return,” Quinlan said. “With solutions like GETs, which increase the efficiency of the grid but are generally low-cost but are not necessarily considered capital projects, a utility isn’t really incentivized to prioritize deploying those.”

State regulators are beginning to require GETs as part of resource planning and are aligning the utility business model by adding incentives, said Yaron Miller, who leads the state policy and campaigns portfolio of Pew’s energy modernization project.

Lawmakers and officials in Minnesota, Virginia, Maine, and Illinois have all approved requirements for utilities to consider grid-enhancing technologies on existing transmission lines across the state. Minnesota now requires transmission owners to study areas of congestion and identify an implementation plan to install GETs at such points.

One powerful incentive could be to return a portion of the savings achieved by GETs to the utility instead of it all going to ratepayers—a shared-savings model that has been used to spur deployment of energy efficiency programs, Miller said.

Utah lawmakers debated a shared-savings model in state legislation promoting GETs, but stopped short of including it in its final version of the bill. US lawmakers introduced legislation in March that would require FERC to establish a shared-savings incentive.

“We need to look at grid-enhancing technologies as some of the lower hanging fruit that we can use to try to improve the performance of the grid,” said Greg White, executive director of the National Association of Regulatory Utility Commissioners, which represents regulators in all 50 states.

Gathering Data

Some utilities are willing to be the first wave of laboratories.

The AES Corp. and LineVision collaborated on the largest single US deployment of dynamic line ratings. The ratings, which measure the maximum transfer capability of each line, ensure the grid operates at maximum efficiency by assessing real-time environmental factors such as air temperature, wind, and conductor temperature. LineVision’s sensors on AES’ grid in Ohio and Indiana mean utilities can respond in real time to fluctuations in demand and renewable energy generation, their case study found.

Vermont Electric Power Co. is partnering with the Electric Power Research Institute to install a valve technology made by Smart Wires. The partnership was among 58 projects across 44 states selected last October by the Energy Department in the first round of the infrastructure law’s grid program.

The New England state is anticipating a doubling of power demand over the next two decades from electric vehicles and heat pumps and is feeling pressure from state renewable energy policy targets. The valve means more reliable and efficient service and less strain on a major transformer that previously struggled to handle controlling flows along the line from New York, with increasing variability due to intermittent wind energy and other sources, VELCO officials said.

“It’s a much more dynamic system, and that requires us to really look outside the box and look at innovative solutions to meet those energy needs,” said Shana Louiselle, communications and public relations manager for VELCO. “With aging infrastructure, upgrades are going to be needed to handle the shift.”

Utility executives and technology providers have been talking much more in the last couple of years, said Eric Holdsworth, managing director, clean energy and environmental policy at the Edison Electric Institute.

“It’s all relatively new—(the executives) have to find out about it, they have to get comfortable with it, and then there’s the scale of the grid,” Holdsworth said. “If you can avoid building at least some additional grid, that’s just all the better given permitting and siting and timelines all the headaches associated with that.”