Will the Electrical Grid Support an All-Electric Future?

The electrical distribution grid is outdated and serves as the backbone of America’s energy infrastructure. Built over a century ago for a simpler era of centralized, one-way electricity flow, today’s grid is inadequate for the demands of a modern, distributed energy world.

The limits of the existing infrastructure will become more evident as utilities integrate renewable generation into the mix. Additional loads are a concern as buildings and transportation electrify with the transition to a carbon-free future.

Fortunately, there are solutions. But creating the grid of the future is going to require political will, significant investment, creative thinking, and a willingness to embrace new approaches.

Our current electrical grid is based on a model that hasn’t been updated since the 1960s. Part of the problem today is its fundamental design. Large generation facilities provided the electricity, flowing one way from the power plant to the end user.

Today’s electrical distribution grid is much more complex, as energy flows in both directions due to distributed energy resources (DERs). DERs include rooftop solar on homes and utility-scale renewables such as wind solar. The grid also supports other large-scale clean generation, such as hydro power from dams and geothermal production. 

There is no question that the grid needs to be updated to reflect the way we generate and use energy today. The problem is that the estimated cost to upgrade the grid nationwide is hundreds of billions of dollars, which is billions with a “B.” As you can imagine, changes or upgrades at this scale will take decades to complete. Improvements to the grid are happening now, and we have made significant progress in the last ten years.

One advantage of the existing grid is that it was overengineered to support 100 percent of the predicted loads when it was built. In many regions, the grid seldom, if ever, experiences 100 percent of its capacity. This buys us some time, which is not to say we are not already experiencing bottlenecks in high-population regions.

Grid improvements become even more complicated once politicians get involved. As you might imagine, there is a considerable political divide over which state or states are responsible for the costs. Red states often favor fossil fuel production, as many supply raw materials for electrical generation. Blue states, on the other hand, frequently support clean energy and the push for electrification.

A contentious issue is when distribution lines cross state lines. What happens when a clean energy resource, such as a large solar farm, wants to deliver its clean-generated energy to another state? Should the state receiving the electricity be responsible for some of the costs of distribution improvements in the state where the generation originated? After all, they are reaping the benefits of the clean generation. As you might imagine, this is a huge issue and won’t be solved overnight. I am sure many lawyers and lobbyists will retire comfortably by supporting their clients’ positions on who will pay for grid improvements in their state.

Canary Media recently published a well-written article that outlines many of the political challenges we are facing and the potential of upgrading the grid.

On May 13, 2024, the Federal Energy Regulatory Commission (FERC) voted on Order No. 1920, which addresses regional transmission policies. This is the first time in a decade that FERC has addressed a regional transmission policy, which includes ensuring that the grid providers design and support a reliable grid for many years.

Order No. 1920 contains specific requirements for transmission providers and outlines long-term planning goals, including who will pay for them. It requires grid providers to produce long-term (20-year) planning strategies that consider future loads on the grid. It considers who benefits from the improvements and what is necessary to update existing infrastructure and facilities.

The most crucial aspect of this decision is defining who pays for these improvements. Order No. 1920 clearly states that customers will only pay for projects that provide a direct benefit. This single line is significant, as this has been one of the most contentious arguments regarding grid improvements. For more details, check out this fact sheet from FERC.

Emerging technologies like microgrids may relieve some of the strain on the grid. A typical microgrid incorporates local generation combined with storage to serve a limited number of users. A college campus is a great example. The generation happens in a large solar farm adjacent to the buildings on campus. During the day, the overproduction of solar is stored in batteries. When the sun goes down, the batteries come online to provide electricity. The next day, the sun comes out and recharges the batteries, and the cycle repeats. Most microgrids are connected to the grid in case the solar charge cycle falls short of the demand. If the microgrid is not using power from the grid, it is considered in “island mode” and does not require any electricity from the grid. Depending on the setup and regulatory rules, microgrids can also send surplus energy back to the larger grid through net energy metering.

Microgrids have numerous advantages over centralized distribution. For example, Microgrids can reduce the risk of fires caused by high winds. Often, utilities are required to power down entire regions to mitigate the potential of damaged or downed power lines during high wind events. With microgrids, power can be shut off to the distribution lines in high-wind areas without affecting adjacent communities. With a less centralized grid, fewer people would lose service, and nearby regions could maintain critical support services at total capacity. Keeping the power on during extreme weather events when the larger grid goes down is essential for building community resilience.  

Another benefit of microgrids is the ability to generate electricity close to or at the point of consumption. If you produce the energy near where you use it, there is no need for miles of high-tension power lines to transport it vast distances across the country. This means the miles of high-tension power lines crisscrossing the nation could slowly disappear and be replaced by smaller subsets of mixed-source energy production facilities.

Microgrids are already being used to improve resiliency. The city of Fremont used a grant from the California Public Utilities Commission (CPUC) to build a small microgrid for three fire stations. The stations can become an “island,” which means they are decoupled from the grid. The stations will still have functionality if the primary grid’s power is shut off or disrupted.

Another potential change to electric distribution is sharing the local resources. An example is a local school with a large solar array. Frequently, a school like this will produce more energy than it can use, especially when school is not in session. Management technologies are available today that can distribute this excess capacity, allowing it to be shared with other buildings or homes. This process is referred to as “community solar.” Add in a wind generation facility or small hydro generation option combined with energy storage, and you quickly see the benefits of local generation.

The microgrid in this example can be isolated from the grid, providing resiliency during emergencies.

As we move forward, there will be more means of producing electricity. The “shared production” model may make more sense than a centralized distribution system. A series of these interconnected microgrids could provide a clean and resilient alternative to the large centralized systems we rely on today.

In many ways, it’s similar to what happened to our landline telephone networks. Telephone lines were initially based on telegraph lines that followed trains as they made their way out west. Eventually, these lines were augmented by telephone lines that branched out and went to each of our homes. Large, centralized companies controlled the flow of information from one point to the other.

Today, cellular phones have completely changed the way we communicate. Cell towers have replaced telephone lines. Communication signals often travel to space and back, providing global coverage. Many homes today no longer utilize landlines for telephone services, as individual house members have cell phones. Cell phones and cell towers have allowed countries to deploy communications networks rapidly without centralized distribution. We will likely see similar advances in the transmission and distribution of electricity in the coming decades.

In 1901, Nikola Tesla demonstrated wireless power distribution. His vision was a world where power was distributed wirelessly. He likely would have succeeded if it were not for the financial interests of others (like Thomas Edison). Researchers are reviewing his concepts and designs today, as wireless electrical distribution would solve many of our problems.

As we move forward, the role of large, regulated utilities supplying electricity will diminish. Companies and even individual homes will share power generation and distribution. This means the role and responsibility of a major generation and distribution provider, such as Pacific Gas & Electric (PG&E), will change significantly or perhaps disappear altogether.

Our current generation and distribution system needs to reflect modern society’s needs. Large-scale utilities know this and are working on the next step in electrical generation and delivery.

Electricity has become the lifeblood of productivity. I challenge you to imagine a modern world without it. Electrical generation and consumption methods must change to keep pace with our society. Wildfires and explosions from energy distribution systems are a real threat and cost human lives. Public awareness and concern may be what it takes to get the masses to consider embracing a new approach to providing, sharing, and consuming electricity in the future.