Recognizing these interdependencies, FERC has endeavored to enable these resources by easing their entry into areas of federal jurisdiction—most notably, wholesale markets—with mixed success.82 Below, we catalog the regulatory state of affairs with respect to core DER technologies and suggest means of better incorporating these resources into grid reliability governance and operations. But the introduction of large quantities of weather-dependent resources makes it ever more important to enhance the cross-visibility and integration of these two systems, because promoting demand-side resources is one key way to produce the flexibility needed for a renewables-heavy grid. For most of the system’s history, the “bulk power system” and the distribution system have remained largely cordoned off from one another, with FERC and NERC attending to the former but with states retaining primary control over their distribution grids. If energy market prices are allowed to reach high levels, retailers may file for bankruptcy instead of paying their wholesale market obligations. In energy-only markets, that means raising the price cap to a high enough level to induce needed suppliers to enter the market and make investments that will allow them to perform during extreme weather events.
- Yet agency decarbonization efforts and the growth of renewable energy have not been the primary culprits of recent major reliability failures.
- However, expanding utility infrastructure is driving up electricity prices, with utilities pushing data centers to bear more investment risk.
- Equally problematic is that regulators and grid operators respond to problems in resource adequacy markets by further siloing energy markets.
- To that end, we decided to take a close look at the numbers to see if the data backs current strategies to enhance reliability.
- Renewables and storage technologies hold a potential solution for grid reliability.
In contrast to what some policies suggest, renewable resource deployment has not worsened reliability outcomes. Utilities in more than half https://innovatenexes.com/network-safety-measures.html of states do not conduct comprehensive integrated system planning that includes the distribution system. However, current data collection practices obscure which component(s) failed during an outage, making it difficult to align investments with the true drivers of customer interruptions.
Microgrids are small-scale https://caribbean21.com/modern-technologies-in-trading-new-opportunities-for-traders.html versions of a larger electrical grid that generate local energy directly to a community or group of users. The power grid typically comes to public attention when there are large-scale failures, like outages caused by a storm. As more states begin to use higher percentages of power from renewable projects, there’s no doubt storage will play an important role. Renewables and storage technologies hold a potential solution for grid reliability.
Disconnection Data Is Finally Available. What Does It Tell Us?
For example, during 2021 Winter Storm Uri and again during 2022 Winter Storm Elliott, natural gas plant failures were a primary cause of grid blackouts.15 These failures can be traced back, in turn, to the ways in which these plants are centrally tied to the natural gas production and transport system—even though governance of the electric grid and natural gas system is separate. In the coming decades, experts project that current transmission line mileage will need to double or triple, as well as become far more interconnected across long distances. We focus here on the “bulk” electric grid, comprised of generators and transmission lines that connect generation to areas of demand. Part IV critiques the marginalization of public values in grid governance processes, highlighting several reforms that could better align grid reliability institutions with public objectives.
Moreover, those utilities that own generation may have incentives not to construct transmission lines that would lower the power prices the utility receives in constrained areas. Membership, in turn, is largely comprised of industry insiders, most of whom have strong financial interests in the outcomes of changes in RTO tariffs and operating agreements and NERC standards. While FERC supervises these entities, it does so under relatively deferential standards of review.42 This largely privatized model of grid governance presents particular challenges for managing reliability under changing circumstances. For example, efforts to expand natural gas pipelines solely for reliability should be viewed skeptically, as batteries, microgrids, or other resources, rather than gas, can often fill reliability gaps. It is essential, then, that reliability policies for natural gas avoid expanding natural gas infrastructure where reliable zero-carbon energy would otherwise have been built. A broader reliability authority, however, is necessary to address the many potential failures of natural gas pipelines that can reduce gas supply to power plants, including, for example, freezing equipment on pipelines.
Modest Reforms to Ameliorate Coordination among Silos
Like NERC, regional entities are private, nonprofit corporations, comprised of utilities and other bulk system actors operating within a region. Although NERC is nominally the central organization responsible for reliability, many other actors play exceedingly important roles. Given its legal control over interstate transmission and interstate sales of electricity, and its mandate to oversee the reliability of the system, FERC in many ways stands at the helm.19 However, it must coordinate with and oversee numerous entities that each have a role in ensuring a reliable electricity system.
The requirement for increased utility infrastructure is causing electricity prices to increase and forcing utilities to seek measures that would make data centers cover more of the risk in their investments. Additionally, governments and regulatory bodies may offer financial incentives for investments in infrastructure upgrades, DER integration, or resilience technologies. Regulatory and policy frameworks play a crucial role in promoting power system reliability by mandating standards and incentivizing best practices.
