Press "Enter" to skip to content

Doubling Down on a Centralized Grid is More Expensive Without Distributed Energy

The economic, environmental, and public health challenges posed by the coronavirus pandemic and the climate crisis in 2020 continue unabated as we usher in a new presidential Administration. And yet, utilities across the United States are expecting to spend more money with their guaranteed rate of return, which clearly means higher electricity bills. We have an opportunity to re-imagine this centralized electricity system with innovation and smart planning.

Last year’s blackouts from Hurricane Isaias were yet another wakeup call that our centralized electricity grid is failing us. Who can forget Superstorm Sandy knocking out power to the northeast – some for over two weeks? In California, large swaths of the state are repeatedly plunged into darkness to reduce the risk of wildfires as utilities apply outdated tools, while overlooking the power of distributed resources to help fortify the grid.

As former regulatory commissioners, we are struck by how many policymakers and utilities believe doubling down on preserving the centralized system is the best way to repair the aging electric grid. We have long advocated for a new system that relies on more distributed energy resources spread across communities, but state commissions have lacked modeling tools that show the pathway for local energy resources, like solar, batteries and geothermal for instance, to benefit our electricity grid.

When planning for future resource investments, most utilities and regulators approach grid and system planning in silos, using tools and models that aren’t equipped to consider the total cost and benefits of distributed energy resources. This has been the case for many decades. For the first time, a team of researchers led by Dr. Christopher Clack looked at the holistic grid and incorporated local solar into grid and system planning. The model that Clack used calculated a least-cost development plan for the grid. The results are striking.

Here’s what their Local Solar Roadmap found: If we invest in local solar and energy storage and other DER technologies — on schools, businesses, farms, apartments, and people’s homes — we can save people $473 billion on their electricity bills between now and 2050. This means deploying at least 247 gigawatts of local rooftop and community solar over the next three decades, enough to power over 25 percent of U.S. homes.

In fact, they found that scaling local solar is actually the most cost-effective way to meet our nation’s climate goals, while creating 2 million jobs along the way, helping build a sustainable economy. Not only is it the most cost-effective way to meet our nation’s climate goals, it will boost resilience as local communities and businesses contend with wildly variant weather patterns — increased storm severity, more devastating wildfires and longer and stronger hurricane seasons — stemming from the climate crisis.

This modeling disproves the old paradigms that claim DERs are too expensive. Continuing to invest in centralized solutions, without considering the contributions from new distributed technologies will result in a costly energy system, with stranded and underutilized investments. And, as we all know, stranded utility costs are traditionally paid for by customers. It’s clear the needs of the electric grid are evolving to a more distributed energy future.

Source: Greentech Media