The Fractal Grid: Introduction
Introduction – The middle child of the value stack – Unlocking Non-Wire Alternatives
The electricity grid is experiencing a paradigm shift changing how, where, and when we produce and consume energy. The Age of the Electron Part II highlighted how Distributed Energy Resources (DERs) are playing a transformative role in this transition in the following ways:
Wholesale Markets: by providing energy, capacity and/or other ancillary services to markets, whether individually or aggregated
Non-Wires Alternatives: by reducing our need for poles and wires or optimizing their usage by being at, or closer to, demand
Resilience: by providing resilience to the end user
All three dimensions have compelling value propositions.
With the rise of variable electricity generation in wholesale energy markets, leveraging the bevy of flexible, digitally-native electrical devices to dynamically balance demand on the bulk grid is becoming increasingly cost effective. Integrating DERs with wholesale markets has received growing political support via orders like FERC 2222 and exhibits tangible, easy-to-understand benefits like eliminating peaker plants and supporting grid emergencies.
Additionally, provisioning on-site resilience – the ability to produce or store electricity during grid outages – is becoming increasingly important as new technologies electrify critical services like heating, transportation, and manufacturing. Resilience also capitalizes on the emotional narrative of American Individualism as marketing campaigns for products like the new Ford F-150 tout the ability to back up homes for multiple days.
In comparison, Non-Wires Alternatives (NWA) seem to be the most inscrutable value stream located in the messy middle between bulk power systems governed by wholesale markets and consumer endpoints at the point of adoption. For a variety of reasons to be explored in this series, NWAs – which will also be referred to as “Distribution System Optimization” – is a sort of middle child, often overlooked and neglected within the DER value stack despite its growing importance.
It is difficult to comprehend, no less sell, the value of optimizing the management and construction of distribution infrastructure because the current institutional environment does not incentivize the telemetry deployment and data processing required to facilitate system awareness at the grid edge. Today, this difficulty manifests as rising delivery costs and interconnection bottlenecks for distributed generation; long term, it will increasingly nudge DERs towards exiting the institutional infrastructure that governs the legacy grid. As the DER market continues to scale and drive down the cost of islanding, microgrid technology may even enable communities to roll back the authority of legacy institutions by owning and managing their own distribution infrastructure, potentially breaking or amending the utility’s century-old natural monopoly on the delivery of electricity.
The focus of this four part series is exploring how and why this transition may occur, beginning with an introduction to fractal patterns and evaluation of community-level resilience and distribution system islanding in Part I. Part II is an assessment of where distribution system optimization fits into the value stack today and how it is closely intertwined with the interconnection process. Part III discusses the dearth of data on distribution infrastructure, the technical requirements for facilitating network awareness, and the implications for DER deployment. Finally, Part IV concludes the series with a philosophical debate on whether the institutions governing the distribution grid must be replaced or simply amended in order to support the energy transition.
Continued in Part I.
Thank you to Bryce Johanneck, Elias Hatem, Colin Bowen, Jake Jurewicz and the DERTF community admins for their valuable feedback on earlier versions of this essay series.