The Case for Grid Thought

Good energy policy frameworks foreground the capabilities of electric grids in terms of their holistic qualities. A holistic approach to energy problems requires understanding the sequence in which resources are added to the grid, how they interact collectively with other resources on the system, and what constraints and opportunities are produced by those interactions for the entire system. Holism matters because distinct compositions produce qualitatively distinct capabilities, each with different policy problems. A grid that is composed entirely of wind, water and solar, requires different governance and topology than, say, one composed entirely of nuclear and intermittent renewables or other conceivable permutations. 

This holism is a way of thinking about energy policy that takes an holistic view of the electric grid as both the network of transmission and distribution lines knitted together by substations, but also the sources and sinks of the electrons. To get the decarbonized energy future we desire we need to adopt a Grid Thought mindset. 

Planning intentionally

The topology of the existing US grid should be viewed as an artifact of economic development, rather than a discretionary variable that can be optimized for the challenges of the present with little regard to how resources are sequenced. The discretion for policymakers lies in how we account for the topology to evolve the grid mix over time to meet our climate and energy goals. The cumulative development of the grid, and hence the evolution of its topology, follows the growth of individual central station utilities as they sought to electrify cities and regions, mostly in the 20th century. Grid development was driven by localized utility needs for serving specific urban and regional load centers with sufficient capacity and the ability to address generation and load imbalances.

The outcome is a grid that is prone to congestion on key network paths that knit disparate regions together, which reduces resiliency and reduces the benefits that mixed renewables portfolios offer as a generating solution.The grid is really a concatenation of smaller, regional grids knitted together by relatively few transmission interconnection lines capable of moving power between distinct regions, whose sources and sinks (i.e. generating resources and loads), have differing capabilities and requirements. 

Challenges for decarbonization

This arrangement presents a challenge for green energy policy, particularly aggressive renewable build out plans, because it limits the solution space to resource plans that preclude benefiting from the cross-continental heterogeneity of generation and load profiles. Put simply, you’re not going to get West Kansas wind power to Southern California with the grid as it stands, because the current structure is not designed for it. This is a challenge, but it’s not insurmountable with the right approach.

Adopting the Grid Thought mindset casts the policy problem as one of iterative planning. In a recent essay, Yakov Feygin and Nils Gilman introduce the Designer Economy, as a policy framework that centers transformational planning with broad social goals of resiliency, sustainability and growth. Consider their appeal to a mode of planning that, “focus[es] in on a dynamically changing future, and [aiming] to produce tools to enable various actors in the economy to adapt to these changes in a [manner] that preserves the public’s preferences through iterative experimentation.” This is the heart of Grid Thought: to get to a decarbonized grid it’s not enough to think about individual generation or storage technologies that hold promise. Nor is it enough to think about specific transmission lines that we would like to see built. Rather, we need to envision the future state we desire and develop plans for a whole grid solution that can operate effectively during and after the transition to a zero-emissions grid.

For example, the International Renewable Energy Agency might release a study that shows the levelized cost of energy for renewables reaching parity with fossil fuels like coal, and a well meaning but incomplete conclusion would be that it’s then just a matter of swapping those resources into the existing grid. Thinking of relative costs is important, but only tells part of the story: how are you going to get that power to load? How do you ensure that it contributes to a reliable grid? That process involves thinking iteratively with a commitment to a degree of flexibility that allows for scrapping notions that, while ideal in one moment, may become inconsistent with the envisioned state as history unfolds. History is messy. Politics shift, new technologies undermine old benefit and cost analyses, all the while our best laid plans remain subject to extreme weather events and stress our infrastructure. For example, it may be necessary for a region to maintain fossil infrastructure or spare capacity even after day-to-day operation has largely decarbonized if surge capacity in the event of demand spikes or a collapse in variable generation remains fossil-based.

Utility planners have a head start on this style of planning, because their charge is to develop integrated resource plans to justify their rates and to ensure their slices of the grid meet reliability standards. But, it’s not enough to leave them alone at their task in their geographically isolated domains: we need to bring this function into more national and regional public institutions with the administrative capacity to ensure that we are jointly planning toward a sustainable and reliable grid that is up to the challenge of the future. This, too, is a difficult task, because the current institutional apparatus for planning for changes in the grid is distributed across a multitude of regulatory bodies, RTOs, ISO, and other formal reliability coalitions, where the focus is limited to solving regional grid problems. This may be perfectly suitable for narrow regional concerns, but it does not ensure the sort of coherence of planning that the big energy transition questions require.

What might future planning institutions look like?

We need national public institutions empowered with rulemaking authority, access to the fiscal tools, and staffed with engineers and technicians that are trained to plan for the  public purpose, freed from the narrow scope of utility planning. I envision such an institution functioning like the War Production Board, whose planners consider joint problems ranging from vehicle electrification to modeling the resource requirements for developing resilient supply chains sufficient to actually build our desired grid. Imagine an administrative agency where you can join a corps of engineers, data scientists, economists and social scientists where the days are spent building tools and doing analysis in the service of designing grid solutions ready made for policycraft.

This all sounds lofty, to be sure, but it’s not new. In the 1920s, when the electric utility was first grappling with big challenges of grid reliability there was a movement behind the concept of Giant Power, a proposal for federal governance of the grid. We should revisit those early efforts and find lessons in them. This doesn’t mean we should wait for a one-shot utopian solution. We can begin by expanding FERC (as we’ve written about here before) to grant new statutory authorities that facilitate coherent national planning, or establishing new authorities that focus on planning for reliability between regions with fiscal tools to support development. Let’s reorient toward a national planning approach. And as we do, let’s remind ourselves that planning is not a one-shot activity, but requires us to keep hold of the contingent aspects of the grid as simultaneously generating resource, load, and wires.