What would the grid look like, and cost, if we stopped ignoring the benefits of DERs and optimized the integration of these resources through a better modeling process? We found that when you use better planning models and scale both local solar and storage, as well as utility-scale solar and wind, you maximize cost savings and unlock the path to the lowest cost grid. The roadmap to the lowest cost grid is paved with distributed solar and storage. PV Mag, Dec 3, 2020
For months now we have heard President-elect Joe Biden tout the job and economic growth that would come from transitioning to a clean electric grid. We’ve also heard from critics who say the new clean electric grid he is proposing will cost upwards of $2 trillion.
These assumptions about costs are misguided, as are other widely-held assumptions about a clean electric grid. Transitioning to a clean electric grid could actually cost less money and save us billions of dollars, create jobs, and result in a cleaner, more reliable grid across the United States.
We found that when you use better planning models and scale both local solar and storage, as well as utility-scale solar and wind, you maximize cost savings and unlock the path to the lowest cost grid. In fact, it could generate nearly half a trillion dollars in savings to ratepayers over the next 30 years.
In recent years, myriad studies conducted in more than twenty states have tried to evaluate the net value of distributed energy resources (DERs) like local solar and storage. While these studies have been used to influence the implementation of tariffs for DERs on a limited scale, none have been able to project those costs and benefits at scale into total system planning processes — in the all-important capacity expansion and production cost modeling that underpins utility system resource planning. In fact, most grid and system planning processes aren’t equipped to consider resources based on their total costs and benefits to the entire system. That’s because they analyze the grid in a piece-meal fashion in distribution, transmission, and generation modules, lack exhaustive data inputs, and can’t fairly consider smaller resources like DERs.
We wanted to know what the grid would look like, and cost, if we stopped ignoring the benefits of DERs and optimized the integration of these resources through a better modeling process aimed at a true least-cost development plan for the entire grid. So we engaged Dr. Christopher Clack of Vibrant Clean Energy to apply his advanced and big-data friendly WIS:dom(R) model to the task. What we found surprised even us.
What did we do?
We had the model compare multiple scenarios: 1.) a “dumbed down” scenario that mimics traditional models by only considering and weighing cost impacts from a central transmission-level grid perspective; 2.) a scenario that integrated and optimized for distributed solar and storage assets located closer to the customers; and 3.) a scenario that sets a clean electricity target of 95% reduction in carbon emissions in each state by 2050 from 1990.
The model spent days crunching data, analyzing over 1.5 trillion data points across every county in the continental U.S., down to a resolution of a single kilowatt, three square kilometers, and intervals of just five minutes—the fine resolution necessary to reveal distributed resource benefits. The model’s ability to work at this detailed scale solved for the complex resource choices that system planners face in the real world, reconciling costs and options across technologies, sizes, and locations.
What did we find?
Not surprisingly, the model built a lot of solar, wind, and storage—over 1,000 GW (a terawatt) of solar and over 800 GW of wind by 2050. What surprised us was how and where it built these resources and why that accounted for hundreds of billions of dollars in potential savings.
The model found that by scaling local solar and storage at the distribution level and closer to customer load, we don’t have to over-rely on the most expensive parts of the transmission system and under-utilize the distribution system as many traditional planners assume. The daily peaks that the system must ramp up and down to serve can be permanently and more cost-effectively managed by local solar assets, storage injections, and off-peak charging. These DERs cost-effectively reshape the load as seen by the large-scale grid, reducing bulk power system costs and smoothing volatility and variation in load across the system. This allows for a more efficient overall allocation of investments, and a more flexible and local electricity system through the addition of 247 GW of distributed solar and 160 GW of distributed storage by 2050.
(Average summer month utility-scale generation and distribution demand in business as usual vs. DER integration and optimization)
And how much does it cost?
Just by integrating and optimizing distributed solar and storage, we found potential for over $300 billion in grid savings. When we asked the model to also meet a 2050 clean electricity target, we found $473 billion in grid savings versus a clean electricity grid that doesn’t scale distributed solar and storage. And finally, and most notably considering current discussions around President-elect Biden’s clean electricity plans, the model found that a clean electricity grid that scales local solar and storage is $88 billion less expensive than maintaining the status quo. These savings are driven by reduced grid costs alone and do not include the massive societal benefits that also come with more local solar and storage.
On top of saving the grid lots of money, deploying more community and rooftop solar and storage will result in massive economic benefits, including jobs, and additional social and environmental indirect benefits. While this analysis didn’t account for these indirect benefits in resource selection, the model did calculate that a clean electricity grid that scales local solar and storage would result in over 2 million jobs by 2050.
But you may ask: if we’re seeing per unit costs for utility-scale solar and wind at less than five cents per kilowatt-hour, why not just build more of that and avoid the higher per-unit costs of local solar and storage? Embedded within the results of this analysis, we found that the lowest cost bulk renewables are optimized when local solar and storage are optimized as well. Analyzing resources on their per unit cost alone is misguided and misleading, and when you run a better analysis that chooses resources based on their net cost to the entire system, you achieve the lowest cost system with a portfolio of resources with varying per unit costs. The sub five cent wind alone still requires the ramping of gas combustion turbines and additional transmission, and the local solar alone still requires capacity support from the bulk power system. But together, they can deploy the maximum efficient amount of bulk power and local power to deliver the lowest cost system for all.
So how can we realize these savings?
As an analogy, while navigating with paper maps is of course still possible, we know there are better, more efficient maps that use modern technology and more and better data to get us where we need to go. If we want to build the lowest cost electric grid that serves the needs of all customers in ways that can adapt to the challenges of a new era, we must evolve the tools we are using in the electricity sector as well.
For too long we’ve used outdated tools, methodologies, and thinking, with too few actors in mind to inform our thinking about how we build a better electricity system. Using new tools that take advantage of technology and big data, we find that a local, clean electric grid isn’t as expensive as we thought—and far more local, too. It turns out we can build a clean grid that empowers consumers and strengthens communities with distributed solar and storage. We can build a grid that leverages private investment while also reducing overall costs on all customers. We can build a grid that increases resilience. And we can build a grid that improves the equity of our electricity system.
So what do we need to do to bring these benefits to life?
Policymakers should apply the outputs of this advanced modeling to all energy policy decisions today. They should demand better planning and analysis that focuses on the most tangible solutions right away, and let the data-driven results guide their decision making on everything from planning, to RPSs, to interconnection, equity, and local solar programs like community solar. They should also establish clear and consistent policies and programs that scale local solar and storage right now, because if we continue on our current trajectory of distributed solar and storage deployments, we will not be able to achieve the maximum cost savings uncovered by our analysis.
We have a data-driven roadmap to the lowest cost grid of the future. Now is the time we must start building and let the benefits start accruing. Because if we’re not saving ratepayers money, then we’re costing them money. We simply cannot afford to wait.
Developing 247 GW of local rooftop and community solar and 160 GW of local energy storage is the most cost-effective way for the United States to transition to a clean energy system by 2050, while saving consumers up to $473 billion on electricity. This is enough local solar to power over 25% of all U.S. homes. These are among the core findings of a new report, “Why Local Solar for All Costs Less: A New Roadmap for the Lowest Cost Grid,” issued by Vote Solar, the Coalition for Community Solar Access and Sunrun.
Using a state-of-the art grid planning tool developed by Vibrant Clean Energy, the analysis goes beyond the limitations of traditional grid planning by leveraging big data and advanced analytics to produce a more complete and inclusive picture of the direct costs and benefits of resources on the grid.
The tool called WIS:dom-P and developed by Dr. Christopher Clack analyzes trillions of data points including every potential energy resource and the direct costs and benefits associated with bringing the most cost effective resource mix to the electric grid. The model was recently updated to take into account, and enhance the delivery of, local solar and storage generation located closer to customers on the distribution side of the grid.
“With better models that evaluate resource selection based on their impact on total system costs we see that scaling local solar and storage — along with utility-scale renewables — will save us hundreds of billions of dollars and achieve the lowest cost path to a clean electric grid,” said Jeff Cramer, executive director of the Coalition for Community Solar Access. “The analysis shows that President-elect Biden’s clean energy plan, if done right and guided by the latest grid modeling tools, has the potential to save the country hundreds of billions of dollars if it includes scaling local solar and storage. These savings are in addition to the massive societal benefits that come with a grid that’s more local and distributed.”
The main takeaways from the advanced modeling show:
- Deploying at least 247 GW of local rooftop and community solar on the grid would be the most cost-effective way to transition to a clean energy system by 2050. It is also the most cost-effective way to reach 95% emission reductions from 1990 levels.
- A clean electric grid that leverages expanded local solar and storage is $88 billion less expensive than a grid that does nothing different than we’re doing today (no clean electricity mandates and not leveraging expanded local solar and storage). This proves that moving to clean electricity targets can save the country money versus the status quo.
- Under a national 95% clean electricity target, leveraging expanded local solar and storage can save the U.S. $473 billion by 2050 compared to a clean electricity grid that doesn’t expand local solar and storage. Expanding local solar and storage on the distribution system reduces the need for power plants that only run on peak power days. It also better manages and reduces demand on the distribution system by offering more local energy products that customers want, which can increase grid resilience and reduce overall costs on the distribution and transmission grid.
- More local solar unlocks the potential of utility-scale solar and wind. The lowest cost grid requires a lot more utility-scale solar. In fact, retiring fossil-fueled power plants that run infrequently and deploying local storage more efficiently will help integrate 798 GW of utility-scale solar and 802 GW of utility-scale wind by 2050.
- Scaling local solar and storage results in over 2 million local jobs by 2050. The cost analysis accounted for direct costs and benefits only, but local solar and storage brings additional societal benefits to communities such as jobs, increased economic development, increased resilience, and more equitable access to the benefits of renewables.
“This study indicates that the current practice of ignoring (or assuming) distributed-scale resources in utility plans will result in higher costs for customers, higher GHG emissions, and lower job prospects for the industry compared with coordinated planning,” said Dr. Christopher Clack, founder and CEO of Vibrant Clean Energy. “Furthermore, the modeling tools required to provide insight for all stakeholders should include computations that resolve the distribution resources at some granularity to perform analysis on the co-benefits.”
“This effort is a giant leap forward in demonstrating the critical role DERs must play in future system planning to provide efficient, effective and reliable solutions for an aging grid, with evolving customer needs,” said Anne Hoskins, former utility regulator and chief policy officer for Sunrun. “By providing the tools to refresh outdated metrics and thinking in our system planning, we unlock a better energy future for all.”
“Our antiquated, centralized power system disproportionately harms low-wealth families and environmental justice communities. The new, least-cost grid envisioned by this innovative roadmap shows us how we can reinvent our energy infrastructure by redistributing power to local communities,” said Adam Browning, executive director for Vote Solar. “Our responsibility now is to ensure that is done equitably, that the voices previously excluded are included, and that the investments required for the new power structure benefit those most harmed by the old one.”
Local solar and storage — part of the group of innovative, affordable technologies sometimes referred to as Distributed Energy Resources (DERs) — are small, distributed facilities that produce and store power closer to the homes and communities where it is being used. The two most common forms of local solar are community solar and rooftop solar, both of which can be paired with battery storage. Community solar, the fastest-growing segment within the solar industry, refers to local solar facilities shared by multiple subscribers who receive credits on their electricity bills for their share of the power produced. Rooftop solar gives people the ability to generate their own power on their own property and store it in a battery for resilience even in the event of grid outages. Both rooftop and community solar help customers lower their monthly utility bills.
CCSA, Vote Solar, and Sunrun call on legislators and regulators to make sure local solar and storage is integrated and optimized into state energy planning using advanced modeling tools like WIS:dom-P and to establish clear and consistent policies and programs that scale local solar and storage right now. The technology is here today; time is of the essence to innovate our system planning so the benefits can be achieved as quickly as possible.
More information and access to the full report can be found here.
News item from Vibrant Clean Energy Kelsey Misbrener, senior editor of Solar Power World.
- Solarman December 1, 2020 at 3:05 pm” This is enough local solar to power over 25% of all U.S. homes.” With higher output solar PV panels being designed and manufactured, like the up coming Violet Power solar PV panel that is reported to be designed with a (50) year in use warranty gives one confidence a robust and yes legacy solar PV system can be designed and built for use by the next generation coming along. Leave something useful, not something to be decommissioned is a good start. Install your own self consumption energy system and leave the middle-man utility as the back up to your system, let’s see them justify their rate increases on ad nauseum from now on.” The tool called WIS:dom-P and developed by Dr. Christopher Clack analyzes trillions of data points including every potential energy resource and the direct costs and benefits associated with bringing the most cost effective resource mix to the electric grid. The model was recently updated to take into account, and enhance the delivery of, local solar and storage generation located closer to customers on the distribution side of the grid.” The major importance of this deep dive software analysis tool is showing (why) one needs to relegate the grid business model to the background of their daily energy needs and support their own self consumption of non-fueled generation as much as they can during the day and into the night without the grid being primary power all of the time.
Electrolysis costs have decreased 40% in five years. Hydrogen could achieve cost parity if the cost of electricity dropped to 3 cents per kWh or lower
- Converting renewable energy to hydrogen as a means of long-term storage in the energy sector could hold the key to helping hydrogen achieve scale and move into the industrial mainstream, multiple experts agree.
- Electrolysis costs have decreased 40% in five years, putting green hydrogen on track to achieve cost parity with hydrogen converted from fossil fuels, or ‘blue hydrogen’, according to Ajay Mehta, general manager for new energies research & technology at Shell, who spoke at a Tuesday panel hosted by GreenBiz.
- Enel Green Power and other companies have begun plans for co-locating green hydrogen plants with renewable energy developments in the U.S., which according to IHS Markit is on tract to exceed $1 billion in hydrogen production within three years.
Shoring up the economic viability of hydrogen will require “massive amounts of collaboration,” according to Mehta, but after several false starts, he and others see reason to believe hydrogen is about to establish a foothold.
“Hydrogen has gone through multiple hype cycles, and has not met its ambition,” Mehta said. But thanks to advances that have boosted the availability of renewable energy and increased government support, he said, “maybe the stars are finally getting aligned.”
Hydrogen is already gaining traction in the transportation sector, with Shell currently building hydrogen fueling stations in California and Germany, Mehta said. But he said increased adoption of green hydrogen production in the energy sector held the key to increasing scale and decreasing costs to competitive levels for other industrial applications.
According to analysis by IHS Markit released the week preceding the panel, hydrogen production is on track to exceed $1 billion by 2023, based on the number of projects already in advanced planning phases. Assuming plans for large-capacity electrolysis plants remain on track, green hydrogen could achieve cost parity with blue hydrogen by 2030 in regions with good access to renewable resources, and by 2040-2050 in additional locations, according to Soufien Taamallah, director of energy technologies and hydrogen research at IHS Markit.
“If plans for large capacity electrolysis plants (100 MW+) do not materialize,” Taamallah said in an email, “it will be difficult to reach cost parity with blue hydrogen.”
But electrolysis is only one part of producing green hydrogen, said Sunita Satyapal, Director of the U.S. Department of Energy’s Hydrogen and Fuel Cell Technologies Office. The price of electricity represents the majority of the cost of hydrogen, she said, but hydrogen could achieve cost parity if the cost of electricity dropped to 3 cents per kWh or lower — which she said low-cost renewable generation is on track to achieve.
However, during the GreenBiz panel, Satyapal questioned whether cost parity with other fuels was the sole means for hydrogen to achieve scale. Rather, she said it could fill an important gap in the energy industry — the need for long-duration, seasonal storage of renewable energy.
“It’s been pretty well shown that batteries can only go so far,” she said. Converting energy to hydrogen could enable the storage of “gigawatts” of renewable energy, she said.
Once stored, it’s not necessarily a given that the hydrogen would be converted back to energy, Satyapal said. Hydrogen could be sold to facilitate the decarbonization of steel manufacturing, fertilizers and oil refining — opening a potential revenue stream for utilities that could, in turn, further decrease the price of decarbonization in the electric sector.
These sorts of deals are already in the works, Mehta said. Indeed, the day after Tuesday’s panel, Enel Green Power announced plans to integrate green hydrogen production into a solar project in the U.S., with the intent of selling the hydrogen produced to a bio-refinery through an agreement with NextChem and Marie Tecnimont.
“In the next five to ten years, I think there is a lot of potential,” Satyapal said.