The U.S. power grid is composed of 10 separate power pools that only connect in a few places. In response to the 2003 East Coast blackout and the need for a more reliable system, Congress passed legislation that directed the Federal Energy Regulatory Commission (FERC) to adopt measures that would increase investment in grid infrastructure.
Creating connections to renewable energy sources is one reason investment is needed. The best areas for wind and solar generation are often far from load centers, so new transmission infrastructure needs to be built to accommodate renewable generation. The location of energy demand has changed with population shifts, requiring new investment in growing areas, like the South and West. Reforming markets, electricity wholesale, and retail market restructuring since 1998 has allowed utilities more flexibility to purchase less expensive power from non-utility generators and suppliers located outside their service territories.
According Navigant, global spending on large-scale transmission system infrastructure for renewable energy integration is expected to grow from $36.7 billion in 2016 to $46.7 billion in 2025.
Renewables being brought onto the grid require a transmission connection. Advances in technology and hardware allow for more efficient transmission of power, and to manage power across an increasingly decentralized grid. System operators and others continue to implement a range of methods to accommodate increased renewables penetrations and reduce barriers to deployment: treating renewables as dispatchable, increasing capability to provide grid services, revising the ancillary service market design, balancing area coordination, and new transmission investment. Electric Vehicles (EVs) will account for 15 percent of total electricity demand in 2040 as well as a significant amount of distributed storage. As such, EVs functioning as batteries for the grid are a major enabler of the energy transition and key aspect of it (decentralized, dynamic, two-way). The impact of an increasing number of EVs on the grid (in terms of demand and storage) illustrates the changes that are underway (200 million by 2040). EV charging infrastructure could be an interesting investment segment in addition to storage and may play an increasing role in Transmission Optimization.
Data according to Navigant, Bloomberg New Energy Finance. Information is current as of January 2017 and subject to change.
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