Navigant Research Blog

Under Pressure, Utilities Look to Self-Healing Grids

— January 7, 2014

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.


In India, 370 Million People in the Dark

— July 30, 2012

Early on the morning of July 30th, India experienced its worst power outage in nearly a decade as electricity supply was down for more than 8 hours to more than 370 million people, a number greater than the population of the United States.  The consequences of rising electricity demand and weak electricity infrastructure are now fully on display, as India attempts to identify the cause of the outage and develop a solution to prevent future widespread outages.  There are myriad technical solutions in development across the globe – smart energy, smart grid, and smart industry technologies and strategies – that India may now feel a more pressing need to adopt.

The power industry’s role in supporting economic development is unparalleled.  In India, the power outage in the north affected agricultural operations in Punjab, telecommunications and commuter services in New Delhi, military operations in Kashmir, and water treatment services in Uttar Pradesh, one of the most densely populated regions in the world.  What’s at stake are the food and water supplies to millions of people, the security of those people, and millions of dollars in gross domestic product.

As the real consequences of this power outage continue to emerge, this debacle is likely to become an impetus for Indian politicians to more aggressively pursue energy infrastructure development.  India faces the problems characteristic of other emerging economies – particularly power theft, heavy dependence on coal and other thermal resources, and a fragile power grid.  In the case of this power outage, rising electricity demand and coal shortages proved to be too stressful for the existing infrastructure.  With India’s electricity demand expected to rise five-fold to six-fold in the coming decades, according to the International Energy Agency (IEA), and GDP growth rate forecast to stay above 6% in the coming years, this is increasingly a liability for a country that has never been known for building and maintaining state-of-the-art infrastructure.  India needs a flexible grid infrastructure that can accommodate growth and encourage resource diversity.  Solutions such as advanced battery storage, distributed solar, and microgrids (India is already home to 17 microgrid installations) can provide such flexibility and diversity.  In the coming years, India will be a hotbed for such technologies.  Pike Research forecasts strong growth in many emerging sectors (solar, energy storage, and electrified transportation) in emerging markets, including India.

The power outage in India is a reminder that cleantech market development is not just about the growth and advancement of new technologies and markets; it’s also about new energy development strategies for emerging economies.  The distinct conditions and challenges faced by emerging markets such as India, China, and Brazil provide lessons for the broader market and may ultimately drive cleantech market expansion.


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