Today, the energy system is fragmented; companies, products, business models and even regulations are incongruent. Better integration of the energy value chain lies at the heart of improved reliability, increased efficiency, lower environmental impacts, and the creation of new opportunities and customer choices.
Although interconnected, energy systems remain largely separate and fragmented with respect to strategy, management, and operations. Technological change is amplifying the cost of failing to integrate systems while also creating opportunities as customers’ expectations with respect to reliable, affordable, and cleaner energy are rising. Many customers also seek greater control of their energy options. To realise the opportunities arising from such change requires fundamentally different thinking.
In 2015, the Electric Power Research Institute (EPRI) engaged with stakeholders to explore what this future may look like. Scenarios were developed and ‘global points of view’ emerged that hold true in most of the scenarios;
- In emerging economies, increased demand for energy will lead to higher electricity use while in developed countries efficiency gains will outweigh energy service growth leading to flat, or even declining overall energy use.
- Electricity demand will grow more rapidly than overall primary energy demand, increasing its share of the energy mix as electrification of industrial and transport systems continues.
- The transport sector will move rapidly along higher efficiency paths, incorporating intelligence and low carbon fuels, including electricity.
- Centralised generation of all fuel types will continue to play an important role as the anchor of the power system. However, evolution to a more diverse energy portfolio will happen with distributed generation sources and renewable energy making inroads into traditional linear utility models.
- Integration becomes the key focus of system planning and rollout as information becomes more plentiful and connections between electricity production and other energy sources increase. This is the fundamental principle behind EPRI’s Integrated Energy Network (IEN) concept.
Contemporary integration approaches
The IEN is a formulation of ideas based on decades of research across all energy sectors throughout the world. The vision is an end state in which currently diverse and disconnected loads such as heating, lighting, transport, and industrial automation are planned, installed, and operated in conjunction with the generation resources they use (fossil fuel, nuclear, and renewable); while using new control technologies, communications, data, and markets to seamlessly manage all the energy resources in an integrated, intelligent web.
The electrification of Africa and the eradication of energy poverty provide a huge opportunity to get the design of the cities and grids of the future correct. The IEN identifies three integrated areas that the architects of Africa’s electricity future could use to inform their thinking and planning;
- Using cleaner energy – as efficiency emerges across the energy sector, electricity demand outpaces energy demand, efficient electrification accelerates and transportation becomes more efficient and cleaner.
- Producing cleaner energy – in which energy reduces its environmental footprint, central-station generation serves an anchor role and renewable energy deploys rapidly.
- Integrating energy resources – focusing on connections across energy sources by leveraging advances in communications, IT and managing data security/resiliency challenges.
Transforming power industry
Planning for such a future in an electric power industry undergoing a dramatic transformation is complicated. The transformation is driven by a variety of factors, including rapid deployment of large-scale variable renewable energy resources (VER) and distributed energy resources (DER); dramatic advances in digital energy; and communications technologies that spur increasing customer choice and control. The focus on reliability will transition from a focus on meeting peak demand to developing a more flexible system that can balance an expanding set of supply and demand resources with continuously changing electricity loads.
As VER and DER displace more traditional synchronous generation – and as customers become more active consumers and producers of energy – planning increasingly will need to explicitly consider the characteristics of supply-side and demand-side options to choose optimal systems that are safe, reliable, affordable, and environmentally responsible, and also flexible and resilient.
Planning capabilities, thinking, and processes will need to evolve to address 10 new critical electric system resource planning challenges, which EPRI describes in a recently published white paper (IEN-P). The specific challenges may vary in significance based on the specific issues faced by each electric company and jurisdiction and will thus need to be prioritised accordingly.
These 10 critical resource planning challenges are interrelated and can be grouped in different ways. Here these challenges are organised into three groups: (i) modelling of changing power system; (ii) integrating forecasts; and, (iii) expanding planning boundaries. The specific order of the challenges described below does not imply their relative importance.
Modelling of changing power system
- Incorporating operational detail: As emerging variable power system resources (primarily solar and wind) replace synchronous generators (e.g. coal, natural gas and nuclear), resource planners will need to explicitly consider operational reliability capabilities of multiple disparate resources and methods to aggregate and model them.
- Increasing modelling granularity: Computer models for conducting long-range resource planning need to include finer geographic resolution and temporal granularity to address new resource planning challenges.
- Integrating generation and T&D planning: Future resource planning will benefit from closer integration of planners across the entire electricity supply chain to understand and evaluate how decisions at one planning level may impact other levels, and to develop an optimal resource plan.
- Expanding analysis boundaries and interfaces: Regulators and external stakeholders are beginning to ask electric companies to address issues outside of their service territories and in other parts of the economy as part of their resource planning activities. For example, the efficient electrification of transportation and other end-use sectors.
- Addressing uncertainty and managing risk: There is a growing need for resource planners to account more explicitly for key uncertainties when developing resource plans, and to adopt new approaches for managing evolving risks.
- Improving forecasting: Improved and more granular forecasting in a rapidly changing world. More accurate forecasts of electric load, VER production, DER adoption, primary energy prices, and weather are high priorities.
- Improving modelling of customer behaviour and interaction: Robust system planning in the future will need to incorporate deeper understanding of electric customer behaviour, incentives to change customer behaviour, and how customer behaviour may impact the performance of emerging customer resources for energy supply, storage, and demand.
Expanding planning boundaries
- Incorporating new planning objectives and constraints: Future resource plans will need to be optimised to achieve objectives beyond traditional least-cost resource adequacy – including resiliency, flexibility, and new environmental and societal objectives – while adhering to system operational reliability constraints.
- Integrating wholesale power markets: Increasingly, planners will need to consider the evolution of wholesale power markets that provide opportunities for companies to buy and sell energy, capacity, and ancillary services; along with the impact of these markets on the economic viability of resources that provide reliability services and other desired system attributes.
- Supporting expanded stakeholder engagement: In recent years, public involvement in company resource planning has increased dramatically. Electric utilities are engaged now more than ever in designing extensive stakeholder engagement processes related to resource planning and responding to stakeholder comments.
Rewiring the current thinking
The IEN pathway outlines first steps to an efficient, reliable, affordable, and cleaner energy future that also is flexible and resilient. Such a future is plausible but not assured as the pathway requires advances in science, technology, markets, policy, regulation, business models, and customer awareness. It calls for a more integrated approach to providing energy services and managing natural resources – a fundamental shift from the planning, operation, and regulation of these systems today.
It leverages digital technologies that enable levels of integration that would have seemed implausible even a few years ago. It requires that technology, policy, regulation, market design and business models innovate in concert for the IEN to be realised. This discussion and the future IEN-P framework can provide value to electric companies, regulators, and other entities engaged in planning the future evolution of the electric sector.
It communicates the drivers and strong needs for increased communication and coordination along the electricity supply chain and among the multiple industries that are becoming more interdependent with the electric sector every day. Above all, it requires global collaboration in innovation and technology through collaborative research and development, the results of which will empower leaders to make sustainable energy decisions. ESI
About the author
Barry MacColl is the senior regional manager for the Electric Power Research Institute covering Africa, Middle East, South East Asia, and Oceania. MacColl joined EPRI from Eskom Holdings, where he worked for 26 years in various positions.
The content and concepts contained in this article are the result of the work of a team at EPRI over many years. The author has summarised these efforts, and encourages readers to delve deeper into the analysis and thinking which can be found at http://integratedenergynetwork.com/. EPRI staffers A. Diamant, T. Wilson and D. Brooks deserve special mention for their contributions to the body of work this article summarises.
Developing a Framework for Integrated Energy Network Planning (IEN-P): 10 Key Challenges for Future Electric System Resource Planning. EPRI, Palo Alto, CA: 2018. 3002010821. https://www.epri.com/#/ pages/product/3002010821/.