Utilities Embracing Emerging Technologies Can Reduce Customer Costs and Support a Cleaner, More Flexible Grid, New Report Says
Katowice, Poland, Dec. 12, 2018 – Electric utilities increasingly can reduce their system infrastructure investments and save customers money by employing non-wires solutions (NWS) —portfolios of distributed energy resources (DERs) like solar photovoltaics, energy storage, energy efficiency and demand response—to cost-effectively meet growing grid needs, according to a report released today by Rocky Mountain Institute (RMI).
In addition to providing customer savings while safeguarding reliable service, NWS can support the integration of smart, customer-centered technologies that promote a cleaner, more flexible and resilient grid, the report, The Non-Wires Solutions Implementation Playbook: A Practical Guide for Regulators, Utilities, and Developers, explains.
The Playbook identifies the key barriers that have inhibited more widespread NWS deployment and provides recommendations to overcome them. These recommendations focus on three themes: establishing more supportive regulatory environments, integrating NWS within a utility’s standard operating procedures and adapting current utility procurement practices to effectively support NWS sourcing.
For the past decade, regulated utilities have spent an average of $55 billion annually upgrading their distribution, transmission and generation infrastructure to meet customer needs. The largest share of this investment has been in distribution infrastructure to maintain and modernize the last-mile networks that deliver energy to homes and businesses.
Using the Playbook, grid planners can improve on this approach to infrastructure investment by more systematically evaluating opportunities to deploy modular—and often lower-cost—NWS portfolios. Doing so reduces the risk that infrastructure investments based on uncertain forecasts may burden ratepayers with higher electricity bills for years to come if demand growth doesn’t materialize, and provides a time-value-of-money benefit since investments can be delayed until needs are realized.
“Utilities are facing new challenges to support the health of a grid that is aging, alongside new customer demands for energy choice and cleaner energy,” Jeff Waller, a principal at RMI and one of the report’s authors, said. “The proliferation of DERs and the growing ability and confidence of grid planners to integrate them into grid operations promises to lower customer costs, cut emissions and diversify the service offerings utilities can offer their customers. We hope our Playbook can be a valuable resource to speed the delivery of these benefits through the deployment of NWS.”
The Playbook also includes practical NWS implementation guidelines to help utilities operationalize NWS programs. These implementation guidelines cover four central elements that are at the heart of a successful utility NWS program: criteria to identify potential non-wires solution projects, competitive RFP processes that lead to meaningful responses, evaluation frameworks to help utilities determine if NWS projects are viable and competitive and a discussion of key contract terms that are specific to non-wires solution projects.
“We have found that with a supportive regulator and our willingness to innovate and rely on the private sector, we can deploy non-wire solutions to benefit our customers and the environment,” Damian Sciano, a director in Distribution Planning for Con Edison, the energy company that serves New York City, said. “RMI’s research shows that if our industry, policy makers and other stakeholders work together, we can unlock the potential of clean energy solutions like solar, battery storage, energy efficiency and combined heat and power.”
The report was released today at the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24), in Katowice, Poland.
RMI consulted with members of the U.S. Climate Alliance, a bipartisan coalition of 17 governors, in drafting this report, which will inform the Alliance’s efforts to advance interstate policy solutions that reduce greenhouse gas emissions and grow the economy.
The report’s release at COP24 comes alongside the participation of governor’s policy advisers from California, Washington, Hawaii and Maryland at COP24 in a series of climate meetings with international counterparts to discuss collaboration on climate solutions. The U.S. Climate Alliance unveiled plans for the Impact Partnership at COP24, which provides technical, analytical and other support to the alliance from civil society.
To access a copy of The Non-Wires Solutions Implementation Playbook, see http://www.rmi.org/insight/non-wires-solutions-playbook
Marketing Manager, Rocky Mountain Institute
About Rocky Mountain Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; Washington, D.C.; and Beijing.