Key Role of T&D Advanced Analytics in the Energy Transition

Author photo: Peter Manos
By Peter Manos

Overview

US electric utility transmission and distribution (T&D) asset owners may look back on August 16th, 2022, as the start of a new era for deeper smart grid improvements. With the Inflation Reduction Act of 2022 (IRA) having been signed into law on this day, tax credits T&D Advanced Analyticsfor electric vehicles (EV), renewable energy sources, and major improvements in T&D infrastructure in the United States, will spur many utilities to lead the charge in enabling industries to combat climate change.

As will be shown in this Insight, the US lags far behind many other countries when it comes to the level of penetration of renewable sources of electric energy.  However, several leading US states have achieved high levels of penetration of renewables, and the drive to meet decarbonization goals will require the US to increase electrification while also reducing emissions associated with electric power generation.

More widespread electrification across Industrial, Commercial, and Residential sectors is a cornerstone for a successful energy transition worldwide, both for developing and developed countries. But the path towards increased adoption of renewable sources of electricity, EVs, and other distributed energy resources must be paved with massive infrastructure improvements, which require utilities to grow their capabilities using advanced analytics. Such improvements are required to tap into the full value of rich, real-time electricity usage and grid performance data that is often under-utilized.

Utilities Increasingly Pressured to Integrate Renewables and DERs

Many utilities in the United States are at a turning point: Will they enjoy the rewards of having shown themselves to be leaders in the energy transition, or will they suffer the risks and disadvantages of being viewed as obstacles to it, even though many of the obstacles they face stem from regulatory issues over which utilities lack control?

The US electric T&D system consists of assets with lifespans in the 25-to-35-year range and has a current asset value between $1.5 and $2.0 trillion. It should not come as a surprise that the price tag for the upgrades planned for over the next few years will be in the hundreds of billions of dollars. With new $7,500 tax incentives for consumers to purchase EVs, along with big boosts for additional wind, solar, and transmission capacity build-out, the IRA will increase grid complexity and the amount of data generated from it. In turn, this increases the value of advanced analytics, along with advanced metering infrastructure (AMI).

Advanced Distribution Management Systems (ADMS) are part of an overall systematic approach which is yielding greater value. The value of the whole can be greater than the proverbial sum of its parts, when supporting more dynamic grid operations by leveraging Distributed Energy Resources and demand response in combination with advanced analytics, and systems relying on more real-time data (including AMI capabilities). Despite AMI’s benefits, 35 percent of US utilities still lack the requisite metering infrastructure to support new service offerings and deeper industrial, commercial, and residential end user programs, including:

  • Time-of-use (TOU) rates.
  • Behind the meter (BTM) services and solutions.
  • Cost savings from peak-shaving/shifting with demand response.
  • Capacity for EV and photovoltaic (PV) owners to sell power back onto the grid during peak demand events.

Many EV chargers have built-in Wi-Fi and metering capabilities, which could circumvent any immediate need for AMI at a particular location. However, utilities that have AMI in place across their distribution system are in a better position to fully leverage the benefits of EVs and other DERs.

Challenges for US Utilities Facing the Energy Transition

The US lags advanced economies in Europe and Asia when it comes to the production of renewable sources of energy vs. total electricity production. A key to closing the gap will be T&D advanced analytics, along with a much-needed push to upgrade the infrastructure for US utilities where Advanced Metering Infrastructure is still lacking.

Advanced analytics and full leveraging of two-way data flows required for electric vehicles and increased penetration of rooftop solar and DER programs require new investments for the 35 percent of US utilities that lack AMI; as well as a portion of utilities that have full or partial installation AMI but have yet to tap into the full value of the available real-time data. Leading utilities now provide better service to customers by sharing information with them about their energy usage and giving them insights into how to lower their bills and maintain equipment at their homes or businesses more economically and reliably.

Benefits generated from T&D advanced analytics are tangible and can be generated quickly. This includes workflow improvements associated with insights driven by new visualization tools along with time-saving tools for automating updates with real-time data in support of standard daily, weekly, monthly, or annual reporting.

Vital Role of T&D Advanced Analytics in the Energy Transition

Advanced analytics, driven by deeper utilization of real-time data from the grid and DERs at the grid edge, is playing an increasingly important role in helping the utility industry address the needs of industrial, commercial, and residential customers to meet increasingly complex demands of decarbonization and the energy transition. T&D system modelling plays a key role.

Some utilities have already begun utilizing digital twins to optimally model future projected states of their transmission systems, along with advanced analytics to evaluate various scenarios for planning purposes. Their journey is just beginning, but the pathways are becoming clear, and the view ahead shows greater value beyond the significant benefits already being realized.

 

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Keywords: Advanced Analytics, Advanced Metering Infrastructure (AMI), Advanced Distribution Management Systems (ADMS), Distributed Energy Resources (DER), Energy Transition, Inflation Reduction Act (IRA), Electric Utilities, ARC Advisory Group.

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