Advanced Energy Perspectives

The need to deploy vast new supplies of advanced energy technologies to achieve a 100% clean electricity system and power the transportation and building sectors with clean electricity is well documented. Expanding the nation’s electric transmission infrastructure — the long-distance high-voltage lines that deliver electricity in bulk from generation resources to local distribution networks — is a key part of achieving that goal. A variety of challenges stand in the way of transmission expansion, ranging from weak planning processes, to fights over who will pay the cost of new lines, to local permitting and siting issues. Addressing these challenges will require policy changes not just at the federal level, where recent attention has been focused, but also in states and local communities.

On September 17, 2020, FERC issued Order 2222, directing the grid operators under its jurisdiction to pave the way for aggregations of distributed energy resources (DERs) into wholesale markets. Recognizing that implementation of Order 2222 requires transmission and distribution system coordination and active engagement from state utility regulators as well, AEE and GridLab convened distribution utilities and AEE members for eight months to build consensus around key distribution system issues. The focus areas of the discussion included interconnection and aggregation review; communications, controls, and coordination; dual participation in both retail programs and wholesale markets; and investment recovery and cost causation. The result is a new understanding of the challenges in making DER participation in wholesale markets work, and ways that utilities, regulators, and industry can work together to overcome them.

When it comes to energy policy, all eyes have been on Washington, D.C., over the past year. Meanwhile, with far less attention, the states continue to lead the way in our energy transition. Between figuring out how to put to work funds from last year’s federal infrastructure bill, carrying out their own mandates for clean energy, and prepping for an electric transportation future, states will remain the primary venue for building an advanced energy economy in 2022. Here are some of the trends AEE will be watching – and engaging in – this year.

An historic investment of $7.5 billion in federal funds for EV charging is on its way, headed for the states. This federal funding, from the Infrastructure Investment and Jobs Act (IIJA) passed by Congress and signed into law in November, will make it easier for state and local policymakers across America to accelerate the electric transportation transition and meet emissions reductions goals they have set for themselves. It will also pave the way for further growth of the more than 15,000 EV-related businesses in the U.S., with tens of thousands of Americans relying on the electric transportation industry for their livelihood. The time is now for states to set themselves up to make the most of this opportunity.

America is re-thinking the way it powers its homes and businesses, and we’re seeing this debate emerge in state legislatures, at public utility commissions, at county and city councils, and in our own kitchens and living rooms. This is because changing appliance economics and performance, consumer preferences, and state and local policies are driving support for clean, efficient, and affordable electric technologies. It is also because a realistic look into the future of energy indicates that we can expect a dramatic decline in the use of natural gas, and an unwieldy and expensive transition if we fail to plan for it.