Modernizing the Grid and How Procurement can Help
What is grid modernization?
Grid modernization is the term used to describe a wide array of updates that have gained recognized importance as the USA’s power transmission and distribution infrastructure ages.
Why is Grid modernization important?
Aging infrastructure has presented a monumental problem to electric utilities across the United States. A 2003 DOE report describe the Grid as “inefficient, congested, and incapable of meeting the future energy needs of the Information Economy without operational changes and substantial capital investment over the next several decades.” According to Joshua Rhodes, Postdoctoral Researcher at The University of Texas at Austin, the depreciated value of the electric grid is $1.5 to $2 Trillion. To replace it would cost almost $5 Trillion. As infrastructure ages, outages and blackouts become more common, bolstering the public outcry for an Utilities to take action to reduce downtime. As such, many utilities have embarked on a journey towards grid modernization.
What Technologies Should I be aware of?
The Department of Energy sponsored the Grid Modernization Initiative that includes 13 programs developing “new architectural concepts, tools, and technologies that measure, analyze, predict, protect, and control the grid of the future.” The table below describes a few of these programs:
What are other Utilities doing?
Duke Energy has committed $13 billion over 10 years to modernize North Carolina’s electric grid, including moving targeted power lines underground, decreasing outages with technologies to self-identify outages and reroute power, and supporting the integration of sustainable power.
Southern California Edison is replacing more than 2,000 miles of cable and automating more than 850 distribution circuits
PG&E is introducing smart meters to gather electricity and natural gas demand data from residential and commercial buildings.
How can Procurement help Utilities succeed with Grid modernization?
Plan effectively: Send out RFI’s and gather as much information as possible before starting an initiative. The most successful projects have a well defined plan.
Fail fast, fail cheap: Since many of these technologies are new, risk is inherent to implementation. Start initiatives with a smaller scope of work, stop the projects that do not show promise, and expand the successful ones.
Identify the best suppliers: Consider engaging in strategic partnerships for highly complex initiatives. Outside firms have core competencies outside of the typical Utility company, so they can bring fresh ideas and inject the latest technology to your solutions.