Distributed generation resources (DGRs), such as solar on our roofs and battery storage devices in our garages, can help lower the cost of electricity and increase consumer choice, while providing clean, local energy. As DGRs become more common, it’s crucial to understand their effects on both local and regional grids. This helps planners better navigate tradeoffs between DGRs and utility-scale generation.
Much is known about how DGRs impact the distribution systems connecting our homes and businesses. For example, many studies
show that by generating power closer to where it is used, DGRs reduce the strain on distribution equipment like transformers and wires. But we know much less about the impact DGRs have on the transmission grid that moves power between states and cities. If DGRs are adopted by many of us, as some predict, how might that impact our transmission systems? Will we be able to avoid building transmission infrastructure by generating electricity at or near our homes and businesses?
Exploring Three Futures
To answer these questions, we performed a 20-year forward-looking planning study for the Western U.S. that explored three futures with varying levels of DGR adoption. Each scenario featured an optimized plan for both generation and transmission expansion to accommodate growing electricity demand, maintain reliability, and achieve states’ policy goals.
The study’s “status-quo” scenario assumed that 40 GW of distributed solar gets built in the Western U.S. by 2040 — up from about 18 GW on the system today. The “accelerated adoption” future assumed a doubling of the DGR adoption rate after 2030, whereas the third “bookend” future assumed all system needs are met by DGRs after 2030. We used the National Renewable Energy Laboratory’s Standard Scenario to help us develop these baseline forecasts.
Since each scenario featured an optimized transmission build, we were able to compare results related to transmission build, generation investment, and system operations to inform our conclusions.
What We Found
A common theme amongst our results: tipping points matter. In all cases, our results varied based on how many DGRs were built out and by when. By comparing our various scenarios, we learned that:
- DGRs can significantly impact transmission flows. The increased use of distributed solar and batteries created new demand for operational flexibility in the mornings and evenings, affecting how power moves and the nature of transmission needs.
- DGR growth above present-day trajectories could cause transmission upgrades to be delayed or avoided. However, some transmission expansion is required no matter what (e.g., DGRs cannot simply avoid the construction of all transmission).
- There are opportunities for “least regrets” transmission investments for futures when DGRs are built at or near status-quo trajectories. So long as DGR levels do not skyrocket, there are likely to be “shared” investments across many planning futures, including those with varying amounts of DGR and utility-scale resource build. This is good news for planners.
- Very high levels of DGRs could increase the need for transmission investment.
These findings raise an important question: In our study why did DGRs’ ability to let us avoid transmission investment stop at a certain level? We think this has to do with operational flexibility. The DGRs considered in the study — distributed solar, short-term storage, and pairings thereof — do not provide the resource diversity the system needs; significant amounts of long-term storage are needed to store solar power and release it back onto the system when the sun isn’t shining.
Planning for Future DGR Adoption
A lot can happen over a 20-year time frame, so we investigated another set of questions. Do we risk building out thousands of miles of high-voltage transmission lines to bring remote wind and solar resources to load centers? Or might such transmission investments be a waste of money if advancements in distributed technologies are made and they are found in most houses and businesses?
We performed this study in hopes of helping planners better navigate complex transmission planning tradeoffs for varying amounts of DGRs and utility-scale resources. Some tips we have for industry going forward are that:
- Incorporating accurate assumptions regarding DGRs in “integrated” planning efforts is critical. Our results were very sensitive to how we modeled these resources.
- Simultaneously planning for transmission, distributed resources, and utility-scale resources must be done to realize optimal planning outcomes.
- There is no single solution to long-term system needs and clean energy policy goals. An all-of-the-above approach for both generation and transmission is advisable in resource planning given the many uncertainties facing the grid over the next 20 years.
- Emerging forms of demand-side technologies that bring diversity and flexibility to the power system will be necessary in any form of “bookend” distributed future.
- Further detailed technoeconomic analysis should inform ideal configurations, locations, and levels of DGRs.
It was our pleasure to perform this study work, and we look forward to discussing these topics and others at ESIG events down the road. We’d like to especially thank Debbie Lew, James Okullo, and Josh Novacheck for their incredible leadership and support throughout our study process.
John Muhs
Senior Consultant
Energy Strategies
Alex Palomino
Senior Consultant
Energy Strategies
Keegan Moyer
Principal
Energy Strategies
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