Smart system investments: No strings – or wires – attached
Every four years, the American Society of Civil Engineers grades the condition and performance of U.S. infrastructure, giving “A” grades for excellence and “F” grades for failure. For energy infrastructure, the country earns a “D+” average. “Most electric transmission and distribution lines were constructed in the 1950s and 1960s with a 50-year life expectancy, and the more than 640,000 miles of high-voltage transmission lines in the lower 48 states’ power grids are at full capacity,” notes the 2017 report card.
Canada, which is largely connected to the U.S. power grid, has its own deficiencies. A 2011 Conference Board of Canada report on the electric sector noted, “With half of the generation assets built before 1980, the industry faces a pressing need to accelerate investment in infrastructure at all levels.”
But, increasingly, utilities and regulators are looking to make those investment in non-wires alternatives (NWAs) to traditional utility infrastructure like power lines and substation. And there’s a good reason for that. Non-wires alternatives cut costs and emissions while shoring up resiliency and satisfying the growing consumer demand for more efficient, greener power options.
Lightening the load
What is a non-wires alternative? Analysts at Navigant Research define it as grid investments that use solutions such as “distributed generation, energy storage, energy efficiency, demand response” and grid controls, to reduce load and thereby defer or replace the need for upgrades to things like T&D lines or transformers.
Why go with the non-wires approach? For one thing, they’re cost effective. In 2013, one New York-based utility faced two substations with overloading on transmission feeders serving them. Rather than spend $1.2 billion on substation upgrades, the utility chose a $200-million investment to slash load by 52 megawatts using a combination of energy efficiency incentives for customers as well as distributed energy resources such as demand management and energy storage.
The utility only needed to come up with traditional utility infrastructure investments to make up 17 megawatts of the projected 69 MW shortfall, and it currently is on track to meet its non-wires targets by the summer of 2018. It will save a billion dollars in the process.
Non-wires alternatives eliminate the need for high investments that are only required to help utilities meet demand a few hours per year. In the Boothbay region of Maine, high summer temperatures pushed transmission lines to near full capacity, but only for 100 hours or so each year. The cost of upgrading the transmission lines so that power providers could continue importing electricity from nearby states and Canada would have been $18 million.
Instead, the state’s utilities commission approved a third-party solution that now has 308 kilowatts of solar photovoltaics, 500 kilowatts of energy storage, 500 kilowatts of back-up generation plus energy efficiency and demand response that facilities peak-load shifting. These resources are aggregated and can be dispatched within 5 minutes to reduce load and congestion on power lines.
Better yet, NWAs can be built in phases, allowing power providers to put them in place as needed rather than saddling ratepayers with large upfront costs, The cost of this project is less than a third of what ratepayers would have had to pay for the transmission line upgrade.
The solution is also cleaner and more efficient traditional generation, too. In addition, having several smaller generation resources instead of one large, centralized plant contributes to greater reliability.
No wonder Navigant Research believes the global NWA market will grow from $63 million to $580 million by 2026.
NWAs are a way to bring an A+ solution to D+ infrastructure cost-effectively.