Thursday, September 12, 2013——The Environmental and Energy Study Institute (EESI) and The German Marshall Fund of the United States (GMF) held a briefing that highlighted the challenges facing electric power systems in the United States and Europe. The future electric grid must be dynamic and adaptive to adequately respond to a number of game-changing trends: the growth of distributed electricity generation, advances in critical technologies, and the expanding role of real-time data in managing the power sector. However, a clear path has yet to be defined that harnesses these trends for a secure, affordable, and low-carbon energy system.
- Neil Brown, Non-Resident Fellow at the German Marshall Fund of the United States, noted that (1) the energy world is increasingly complex, with many different players, interest groups and implications and (2) in such an environment, solutions will require diverse coalitions between industry and civil society players.
- Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission (FERC), said that, historically, the electric grid consisted of a disparate collection of isolated generators which developed to serve specific communities. The grid was not planned to be an integrated system.
- Wellinghoff said that, in contrast, America's natural gas transmission system was integrated from the start. When the natural gas industry began to grow, the nation needed pipelines to bring the gas from locations from which it was extracted to where the demand was. The Federal Power Act of 1935 and the Natural Gas Act of 1938 gave FERC sole authority to determine how these transmission lines were built.
- The networked natural gas transmission system enables natural gas to be sold at the same price all over the country. Electric grid costs, however, vary all across the country, based on each area's relative congestion and ability to move energy. The question is how to ensure that electricity prices are affordable and become more uniform, to create a more efficient and integrated grid overall.
- The current situation with renewable energy sources like wind and solar is similar to the past situation with natural gas, when the best resources were far away from the locations where the energy was needed. The highest quality wind resources are in the Great Plains/Midwest, and the highest quality solar energy is in the Southwest, but the majority of the U.S. population is on the coasts.
- Wellinghoff went on to explain that there is an increasing amount of distributed generation, which reduces the need for networked grid transmission lines.
- Load growth is no longer what it used to be, and has shrunk to a growth rate of 1 percent or less per year.
- Wellinghoff highlighted a new trend among electricity consumers: they now want to have an impact on the utility industry. He said customers want to take control, act as a grid asset as well as a consumer.
- Daniel Dobbeni, President of Eurogrid International and former President of the European Network of Transmission System Operators for Electricity (ENTSO-E), said the European grid system is very similar to the American one. He discussed the game-changer that occurred in 2007 when the European Union decided that 20 percent of all energy consumption would be met by renewables. This means that 33-35 percent of the European Union's energy sources need to be renewable by 2020.
- Some areas of Europe are further ahead in terms of their renewable energy goals than others. Germany, for example, has already met the 20 percent goal.
- Dobbeni noted that the grid is moving to hybrid, small unit systems. He said this was not just an evolution of the grid, but a mutation.
- Dobbeni described the new electric grid consumer as a "prosumer," both a consumer and a producer. At different times, the prosumer will be either producing electricity or consuming it. The electric grid needs to change to better fit this new reality, but change is only possible if regulations are structured to allow for it. The speed of change is driven by technological innovations, and legislation needs to catch up.
- As long as we have no effective storage, it is necessary to balance the mix of types of electrical generation that contribute to the grid. This is because you have to consume what you produce directly after you produce it. The "holy grail" of the electricity system is cheap, reliable storage.