Cleantech Market Intelligence
Under Pressure, Utilities Look to Self-Healing Grids
The weekend before Christmas, one of my longtime neighbors cornered me and posed a number of questions regarding the impact of distributed renewables on the reliability of the local electric distribution grid. The conversation suggested that utility customers are increasingly concerned with grid reliability issues, driven by media coverage of global climate change, natural disasters, presidential speeches, and financial investment. In fact, the technologies and the breadth of the self-healing grid continue to change, as they have over the past 20 years or so.
Whether caused by global climate change or regional mega storms, the winter storm damage and outages across New England, as well as major damage to the transmission and distribution grid in New Jersey and New York due to Tropical Cyclone Sandy, have accelerated public awareness that the power grid could go down for days. Suddenly, the need for a resilient, self-healing grid has become urgent. And lurking in the background is the question of how capital-intensive grid improvements will be funded in this post-stimulus grant era.
Hardware to Software
In New Jersey, the damage to the grid was so extensive that PSE&G, the state’s largest publicly owned utility, said it will request rate case funding for the Energy Strong program, a 10-year, $3.9 billion proposal to protect and rebuild utility transmission and distribution systems. In New England during November 2013, ISO New England released its Regional System Plan, which includes a wide range of transmission and distribution grid improvements that will be rate-based in future years.
A recent study on cleantech investment trends indicated that early- and mid-stage VC investments have moved away from smart grid equipment and smart metering to focus on the devices and analytics software necessary for resilient, self-healing grid systems – not only for transmission and distribution, but also for integrating distributed renewables and supporting storage devices at the edge of the grid. These investments will ultimately take full advantage of new developments in big data analytics and the huge volume of information that will become available on the Internet of Things.
When the president of the United States talks about the self-healing grid in his 2013 State of the Union address and a widely followed investment website like The Motley Fool points to self-healing grids as a “Big Smart-Grid Investment Idea for 2014,” maybe it’s time to take a closer look. Upcoming reports from Navigant Research will examine many of these technologies in 2014 ‑ including my next report, Flexible AC Transmission Systems.