Transforming the Grid to Revolutionize Electric Power in North America
“GRID 2030”
     A NATIONAL VISION FOR
 ELECTRICITY’S SECOND 100 YEARS
                                  July 2003
                                   .     .
                    United States Department of Energy
               Office of Electric Transmission and Distribution
A CALL FOR LEADERSHIP
Accessible, abundant, and affordable electric power is one of the
cornerstones of the U.S. economy. On February 6, 2003 President Bush
highlighted the need to “...modernize our electric delivery system...for
economic security...and for national security.” The U.S. Department of
Energy is committed to leading a national effort to do this.
The National Academy of Engineering has called the North American
power grid the “…supreme engineering achievement of the 20th
century.” One of the aims of this document is to envision a future
electric system for North America that will be considered the supreme
engineering achievement of the 21st century.
Modernizing America’s electric system is a substantial undertaking. The
Nation’s aging electro-mechanical electric grid cannot keep pace with
innovations in the digital information and telecommunications network.
Power outages and power quality disturbances cost the economy
billions of dollars annually. America needs an electric superhighway to                 “National
support our information superhighway.                                                 leadership is
                                                                                 needed to create a
Change of this magnitude requires unprecedented levels of
                                                                                 shared vision of the
cooperation among the electric power industry’s many stakeholders.
                                                                                  future and to build
Hundreds of billions of dollars of investment will be needed over the
                                                                                    effective public-
coming decades to accomplish modernization of the electric system.
National leadership is needed to create a shared vision of the future
                                                                                 private partnerships
and to build effective public-private partnerships for getting there.
                                                                                  for getting there.”
Imagine the possibilities: electricity and information flowing together in
real time, near-zero economic losses from outages and power quality
disturbances, a wider array of customized energy choices, suppliers
competing in open markets to provide the world’s best electric services,
and all of this supported by a new energy infrastructure built on
superconductivity, distributed intelligence and resources, clean power,
and the hydrogen economy.
The challenges are great, but the opportunities are greater. Please join
with the U.S. Department of Energy and the Office of Electric
Transmission and Distribution in helping to create a more prosperous,
efficient, clean, and secure electricity future for all Americans.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years           i
ii   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
EXECUTIVE SUMMARY
On April 2-3, 2003, 65 senior executives representing the electric utility
industry, equipment manufacturers, information technology providers,
Federal and state government agencies, interest groups, universities, and
National Laboratories met to discuss the future of North America’s
electric system. (A list of the
participants can be found in the                            VISION
appendix.)                                        “Grid 2030” energizes                 a
                                                             competitive North American
The intent of the meeting was to                             marketplace for electricity. It
identify a national vision of the future                   connects everyone to abundant,
electric system, covering the entire                       affordable, clean, efficient, and
value chain: generation, transmission,                     reliable electric power anytime,
distribution, storage, and end-use.                         anywhere. It provides the best
The focus was on electric delivery –                           and most secure electric
“the grid,” or the portion of the electric                  services available in the world.
infrastructure that lies between the
central power plant and the customer
– as well as the regulatory framework that governs system planning and
market operations.
The purpose of this document is to describe the common vision
articulated at that meeting. The U.S. Department of Energy will use this
vision to help implement President Bush’s call for “…modernizing
America’s electric delivery system” and the 51 recommendations
contained in the National Transmission Grid Study. Various stakeholders,
including industry practitioners, policy makers, and researchers, will use
the vision as the coordinating foundation for actions leading to the
construction of a 21st century electric system. The vision will guide the
development of the National Electric Delivery Technologies Roadmap.
The meeting proceedings, which includes the presentations and
summaries of the notes from the facilitated breakout sessions, can be
downloaded at www.energetics.com/electric.html.
Major Findings
 America’s electric system, “the supreme engineering achievement of
  the 20th century,” is aging, inefficient, and 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.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years              iii
                          Unprecedented levels of risk and uncertainty about future
                           conditions in the electric industry have raised concerns about the
                           ability of the system to meet future needs. Thousands of megawatts
                           of planned electric capacity additions have been cancelled. Capital
                           investment in new electric transmission and distribution facilities is
                           at an all-time low.
                          The regulatory framework governing electric power markets – both
                           at the Federal and state levels – is also under stress. Efforts to
                           loosen regulations and unleash competition have generally fallen
                           short of producing their expected results.
“The ‘technology          There are several promising technologies on the horizon that could
readiness’ of critical     help modernize and expand the Nation’s electric delivery system,
electric systems           relieve transmission congestion, and address other problems in
needs to be                system planning and operations. These include advanced
accelerated,               conductors made from new composite materials and high
particularly for           temperature superconducting materials, advanced electric storage
high-temperature           systems such as flow batteries or flywheels, distributed intelligence
superconducting            and smart controls, power electronics devices for AC-DC
cables and                 conversion and other purposes, and distributed energy resources
transformers, lower-       including on-site generation and demand management.
cost electricity
                          The revolution in information technologies that has transformed
storage devices,
                           other “network” industries in America (e.g., telecommunications)
standardized
                           has yet to transform the electric power business. The proliferation of
architectures and
                           microprocessors has led to needs for greater levels of reliability and
techniques for
                           power quality. While the transformation process has begun,
distributed
                           technological limitations and market barriers hinder further
intelligence and           development.
‘smart power’
systems...”               It is becoming increasingly difficult to site new conventional
                           overhead transmission lines, particularly in urban and suburban
                           areas experiencing the greatest load growth. Resolving this siting
                           dilemma, by a) deploying power electronic solutions that allow
                           more power flow through existing transmission assets and b)
                           developing low impact grid solutions that are respectful of land use
                           concerns, is crucial to meeting the nation’s electricity needs.
                         Conclusions
                          The “technology readiness” of critical electric systems needs to be
                           accelerated, particularly for high-temperature superconducting
                           cables and transformers, lower-cost electricity storage devices,
                         iv                    “Grid 2030” — A National Vision for Electricity’s Second 100 Years
    standardized architectures and techniques for distributed
    intelligence and “smart” power systems, and cleaner power
    generation systems, including nuclear, clean coal, renewable, and
    distributed energy devices such as combined heat and power.               “An expanded
                                                                              research,
 A breakthrough is needed to eliminate the “political log jam” and           development, and
  reduce the risks and uncertainties caused by today’s regulatory
                                                                              deployment effort is
  framework. This includes clarifying intergovernmental jurisdiction,
                                                                              paramount.”
  establishing “rules of the road” for workable competitive markets
  wherever they can be established, ensuring mechanisms for
  universal service and public purpose programs, and supporting a
  stable business climate that encourages long-term investment.
 Industry will be investing billions of dollars over the next several
  decades to replace electric power equipment. The economic life of
  this new equipment will last 40 years or more, so this turnover of
  the nation’s capital stock of electric power assets needs to include
  the latest technologies to ensure clean, efficient, reliable, secure,
  and affordable electricity for generations to come. An expanded
  research, development, and deployment effort is paramount.
 A logical next step is the collaborative development of a National           “A logical next step
  Electric Delivery Technologies Roadmap. This technology Roadmap              is the collaborative
  will be principally used for guiding public and private research,             development of a
  development, and demonstration programs.                                       National Electric
                                                                                     Delivery
       • The Roadmap should build on prior similar efforts by the
                                                                                   Technologies
         Electric Power Research Institute, National Rural Electric
                                                                                  Roadmap...the
         Cooperative Association, North American Electric Reliability
         Council, California Energy Commission, New York State
                                                                                Roadmap should
         Energy Research and Development Authority, and others.
                                                                               complement similar
                                                                               efforts ... and focus
       • The Roadmap should complement technology roadmapping                      on electricity
         efforts by the U.S. Department of Energy in nuclear,                       delivery...”
         renewable, and clean coal power generation systems, energy
         efficiency technologies, and hydrogen energy systems.
       • The Roadmap should focus on technologies for the electricity
         delivery portion of the Nation’s power grid and should address
         technology needs for energy assurance and security.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years        v
vi   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
TABLE OF CONTENTS
A Call for Leadership ...................................................................... ii
Executive Summary ........................................................................ iii
1.       Introduction .......................................................................... 1
2.       Electric Power System Today ................................................... 3
3.       Factors Affecting the Future of the Electric System .................. 11
4.       Vision of the Future Electric System ....................................... 17
5.       Achieving the Vision ............................................................ 23
6.       Path Forward ...................................................................... 27
Appendix – Participating Organizations .......................................... 29
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                              vii
viii   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
  1               INTRODUCTION
              Sixty-five senior executives from electric and gas utilities,
              equipment manufacturers, information technology
companies, Federal and state government agencies, labor unions,
interest groups, universities, and National Laboratories participated in
the “National Electric System Vision Meeting” held in Washington,
D.C., on April 2 and 3, 2003. (A list of the
participants can be found in the
appendix.) This document reflects the
ideas and priorities put forth by the
meeting participants.
The meeting was held in response to
specific recommendations contained in the
Bush Administration’s National Energy
Policy, the National Transmission Grid
Study, and the Report of the Secretary of
Energy’s Electricity Advisory Board.
Together, these documents outline a
                                                       The proceedings can be downloaded at
comprehensive approach to modernizing
                                                             www.energetics.com/electric.html
and expanding America’s electricity
delivery system. They cover regulatory, market, and technology
development strategies. They each call for stronger Federal leadership
in overcoming the challenges that currently hinder the development of
a “21st century” electric grid.
America’s electric system cannot be modernized and expanded by
industry or government alone. This task requires strong public-private
partnerships to strengthen the effectiveness of the regulatory
framework, foster a stable business climate for long-term investments,
and conduct a comprehensive research, development, and
demonstration program in advanced electricity technologies.
The U.S. Department of Energy has recently created the Office of
Electric Transmission and Distribution to provide stronger leadership
and serve as the focal point for policy and technology development
activities in the Department related to the electric grid. This Vision, and
the forthcoming Roadmap, are critical tools for coordinating activities
between the Department, all of the participating organizations, and
other stakeholders.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years            1
                     Several efforts by industry have identified future needs and strategies
                     for electricity. Especially notable are the prior efforts performed by the
                     Electric Power Research Institute, the National Rural Electric
                     Cooperative Association, North American Electric Reliability Council,
                     and the California Energy Commission. While these activities have
                     been successful, they are geared toward charting a course of action
                     only for the respective organizations. The U.S. Department of Energy
                     has launched this effort to identify potential actions for all affected
                     stakeholders and to determine where Federal leadership and Federal
                     funding can be best applied to leverage private capital and state and
                     local investments. Unlike other planning activities, this work does not
                     attempt to forecast future conditions and possibilities or outline a range
                     of potential scenarios. It focuses on developing a broad vision, one
“The U.S.
                     that is based on the desires and input of a diverse set of stakeholders
Department of
                     and can be achieved if all of the goals and actions are met.
Energy has
launched this        The vision and roadmap process has been a useful technique for
effort to identify   organizing research, development, and demonstration partnerships
potential actions    involving the U.S. Department of Energy, industry, universities, and
for all affected     National Laboratories. The process typically involves two meetings: 1) a
stakeholders and     vision meeting attended by senior executives, policy officials, industry
to determine         leaders, and visionaries; and 2) a subsequent roadmap meeting
where Federal        attended by technology managers, experts, and practitioners. The first
leadership and       establishes “why” and “what.” The second addresses “how” and
Federal funding      “when.”
can be best
                     The diverse set of participants at the vision meeting provided a broad
applied to
                     range of perspectives and opinions. The meeting included discussions
leverage private
                     of the following topics:
capital and state
and local             The status of America’s electric system today
investments.”
                      The factors – both supporting and inhibiting – affecting the future
                       modernization and expansion of the electric system
                      A vision of the future electric system
                      The “grand challenges” to be overcome in achieving the future
                       vision
                      Key strategic goals that need to be achieved along the way
                     This document is organized into chapters that correspond with these
                     discussion topics.
                     2                     “Grid 2030” — A National Vision for Electricity’s Second 100 Years
   2              ELECTRIC POWER SYSTEM
                  TODAY
Electric power is essential to modern society. Economic prosperity,
national security, and public health and safety cannot be achieved
without it. Communities that lack
electric power, even for short periods,
                                            ELECTRICITY AND ECONOMIC GROWTH
have trouble meeting basic needs for
                                                  The historical importance of electricity to
food, shelter, water, law, and order.            economic growth is expected to continue.
                                                                           4.5
In 1940, 10% of energy consumption
                                                                            4
in America was used to produce
                                                                           3.5
electricity. In 1970, that fraction was                                                               Gross Domestic Product
                                                        Ratio Year: 1970
                                                                            3
25%. Today it is 40%, showing                                              2.5
                                                                                                                              Electricity Sales
electricity’s growing importance as a                                       2
source of energy supply. Electricity has                                   1.5
the unique ability to convey both                                            1
                                                                                     Total Energy Consumption
                                                                           0.5
energy and information, thus yielding
                                                                            0
an increasing array of products,                                            1970          1980        1090             2000       2010            2020
services, and applications in factories,                                                                        Year
                                                                                 Source: U.S. Department of Energy Transmission
offices, homes, campuses, complexes,                                                           Reliability Multi-year Program Plan
and communities.
The economic significance of electricity is staggering. It is one of the
largest and most capital-intensive sectors of the economy. Total asset
value is estimated to exceed $800 billion, with approximately 60%
invested in power plants, 30% in distribution facilities, and 10% in
transmission facilities.
Annual electric revenues – the Nation’s “electric bill” – are about $247
billion, paid by America’s 131 million electricity customers, which
includes nearly every business and household. The average price paid
is about 7 cents per kilowatt-hour, although prices vary from state to
state depending on local regulations, generation costs, and customer
mix.
There are more than 3,100 electric utilities:
 213 stockholder-owned utilities provide power to about 73% of the
  customers
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                                                        3
                     2,000 public utilities run by state and local government agencies
                      provide power to about 15% of the customers
                     930 electric cooperatives provide power to about 12% of the
                      customers
                    Additionally, there are nearly 2,100 non-utility power producers,
                    including both independent power companies and customer-owned
                    distributed energy facilities.
                    The bulk power system consists of three independent networks: Eastern
                    Interconnection, Western Interconnection, and the Texas Interconnection.
                    These networks incorporate international connections with Canada and
                    Mexico. Overall reliability planning and coordination is provided by the
                    North American Electric Reliability Council, a voluntary organization
                    formed in 1968 in response to the Northeast blackout of 1965.
                                                              Electric Generation
FORECAST OF FUTURE ELECTRIC GENERATION                        America operates a fleet of about
  More than 350 GW of new capacity needed by                  10,000 power plants. The average
                   2020
                                                              thermal efficiency is around 33%.
                                                              Efficiency has not changed much since
                                                              1960 because of slow turnover of the
   Gigawatts
                                                              capital stock and the inherent
                                                              inefficiency of central power generation
                                                              that cannot recycle heat. Power plants
                                                              are generally long-lived investments; the
                                                              majority of the existing capacity is 30 or
                                                              more years old.
                         U.S. Generation Capacity
                         Capacity Additions            The rougly 5,600 distributed energy
                         Capacity Retirements          facilities typically combine heat and
               Source: EIA Annual Energy Outlook 2002
                                                       power generation and achieve
                                                       efficiencies of 65% to 90%. Distributed
                     energy facilities accounted for about 6% of U.S. power capacity in 2001.
                    The profile of the electric power generation industry is changing rapidly,
                    however. A shift in ownership is occurring from regulated utilities to
                    competitive suppliers. The share of installed capacity provided by
                    competitive suppliers has increased from about 10 percent in 1997 to
                    about 35 percent today. Recent data suggest this trend is slowing.
                    Also, cleaner and more fuel-efficient power generation technologies are
                    becoming available. These include combined cycle combustion turbines,
                    4                           “Grid 2030” — A National Vision for Electricity’s Second 100 Years
wind energy systems, advanced nuclear power plant designs, clean
coal power systems, and distributed energy technologies such as
photovoltaics and combined heat and power systems.
Because of the expected near-term retirement of many aging plants in
the existing fleet, growth of the information economy, economic
growth, and the forecasted growth in electricity demand, America faces
a significant need for new electric power generation. In this transition,
local market conditions will dictate fuel and technology choices for
investment decisions, capital markets will provide the financing, and
Federal and state policies will affect siting and permitting. It is an
enormous challenge that will require
a large commitment of technological,
financial, and human resources in the          U.S. TRANSMISSION INVESTMENTS
years ahead.                                   Annual investment in transmission facilities has been
                                                                                      declining since 1975.
Electric Transmission                                                             5
Even with adequate electric
                                                                                  4
                                                        Transmission Investment
                                                        (billion 1999-$/year)
                                                                                              -$117 million/year
generation, bottlenecks in the
transmission system interfere with the                                            3
reliable, efficient, and affordable
delivery of electric power.                                                       2
                                                                                  1
America operates about 157,000
miles of high voltage (>230kV)                    0
electric transmission lines. While                1975    1980 1985 1990 1995 2000
electricity demand increased by about               Source: U.S. DOE National Transmission Grid
                                                                                Study May 2002
25% since 1990, construction of
transmission facilities decreased
about 30%. In fact, annual investment in new transmission facilities has
declined over the last 25 years. The result is grid congestion, which can
mean higher electricity costs because customers cannot get access to
lower-cost electricity supplies, and because of higher line losses.
Transmission and distribution losses are related to how heavily the
system is loaded. U.S.-wide transmission and distribution losses were
about 5% in 1970, and grew to 9.5% in 2001, due to heavier
utilization and more frequent congestion. Congested transmission
paths, or “bottlenecks,” now affect many parts of the grid across the
country. In addition, it is estimated that power outages and power
quality disturbances cost the economy from $25 to $180 billion
annually. These costs could soar if outages or disturbances become
more frequent or longer in duration. There are also operational
problems in maintaining voltage levels.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                                       5
             America’s electric transmission problems are also affected by the new
             structure of the increasingly competitive bulk power market. Based on a
             sample of the nation’s transmission grid, the number of transactions
             have been increasing substantially recently. For example, annual
             transactions on the Tennessee Valley Authority’s transmission system
             numbered less than 20,000 in 1996. They exceed 250,000 today, a
             volume the system was not originally designed to handle. Actions by
             transmission operators to curtail transactions for economic reasons
             and to maintain reliability (according to procedures developed by the
             North American Electric Reliability Council) grew from about 300 in
             1998 to over 1,000 in 2000.
             Additionally, significant impediments interfere with solving the country’s
             electric transmission problems. These include: opposition and litigation
             against the construction of new facilities, uncertainty about cost
             recovery for investors, confusion over whose responsibility it is to build,
             and jurisdiction and government agency overlap for siting and
             permitting. Competing land uses, especially in urban areas, leads to
             opposition and litigation against new construction facilities.
ANNUAL COST OF POWER OUTAGES AND                   Electric Distribution
POWER QUALITY DISTURBANCES
                                                   The “handoff” from electric
                                                   transmission to electric distribution
       Cost of:
         PQ Disturbance Power Outage
                                                   usually occurs at the substation.
                                                   America’s fleet of substations takes
                                                   power from transmission-level
                                                   voltages and distributes it to hundreds
                                                   of thousands of miles of lower voltage
                                                   distribution lines. The distribution
                                                   system is generally considered to
                                                   begin at the substation and end at the
                                                   customer’s meter. Beyond the meter
Source: Primen, “The Cost of Power Disturbances to
                                                   lies the customer’s electric system,
          Industrial & Digital Economy Companies”  which consists of wires, equipment,
                                                   and appliances – an increased
                 number of which involve computerized controls and electronics which
                 ultimately operate on direct current.
             The distribution system supports retail electricity markets. State or local
             government agencies are heavily involved in the electric distribution
             business, regulating prices and rates-of-return for shareholder-owned
             distribution utilities. Also, in 2,000 localities across the country, state
             and local government agencies operate their own distribution utilities,
              6                      “Grid 2030” — A National Vision for Electricity’s Second 100 Years
as do over 900 rural electric cooperative utilities. Virtually all of the
distribution systems operate as franchise monopolies as established by
state law.
The greatest challenge facing electric distribution is responding to
rapidly changing customer needs for electricity. Increased use of
information technologies, computers, and consumer electronics has
lowered the tolerance for outages, fluctuations in voltages and
frequency levels, and other power quality disturbances. In addition,
rising interest in distributed generation and electric storage devices is
                                                                                “The national
adding new requirements for interconnection and safe operation of
                                                                                average load
electric distribution systems.
                                                                                factor is about
Finally, a wide array of information technology is entering the market          55%. This
that could revolutionize the electric distribution business. For example,       means that
having the ability to monitor and influence each customer’s usage, in           electric system
real time, could enable distribution operators to better match supply           assets, on
with demand, thus boosting asset utilization, improving service quality,        average, are
and lowering costs. More complete integration of distributed energy             used about half
and demand-side management resources into the distribution system               the time.”
could enable customers to implement their own tailored solutions, thus
boosting profitability and quality of life.
Demand-Side Management
Customer activities, needs, wants, and desires, as well as the weather,
shape patterns of electricity use, which vary by the time of day and
season of the year. These patterns typically result in high concentrations
of electricity use in “peak periods.” The larger the peak period, the
greater the amount of electric resources that will be needed to meet it,
including distribution, transmission, and generation assets.
The national average load factor (the degree to which physical facilities
are being utilized) is about 55%. This means that electric system assets,
on average, are used about half the time. As a result, steps taken by
customers to reduce their consumption of electricity during peak
periods can measurably improve overall electric system efficiency and
economics.
Mechanisms to reduce peak demand include time-of-use pricing, load
management devices such as “smart” thermostats, load-shifting
technologies such as energy storage, and peak-eliminating techniques
such as distributed generation and thermally activated heating,
cooling, and humidity control devices.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years          7
                      A recent study estimated the potential economic benefits of demand
                      response activities. For example, economic benefits from demand
                      bidding range from about $80 to about $800 million annually,
                      depending on the level of system need. Economic benefits from
                      emergency demand response range from about $85 to more than
                      $300 million annually.1
“North America’s
                      The industry that provides these types of demand-side management
world-class
                      and distributed energy products and services is searching for profitable
electric system is    business models. A “boom-bust” cycle is preventing sustainable
facing several        markets for these businesses from emerging.
serious
challenges.           Regulatory Framework
Major questions
                      America’s electric system is vested with the public interest. “Universal
exist about its
                      electric service” is considered a fundamental part of America’s social
ability to continue
                      compact. While complete deregulation of the electric industry is not a
providing citizens    realistic goal, restructuring of regulations to open up more segments of
and businesses        the industry to competitive market forces is possible when it is done in
with relatively       a workable manner that increases benefits to customers.
clean, reliable,
and affordable        Restructuring of the electricity industry, which began in earnest as a
energy services.”     result of the Energy Policy Act of 1992, has been difficult to achieve, for
                      a variety of reasons. For example, the Federal Energy Regulatory
                      Commission regulates interstate wholesale markets. State and local
                      agencies regulate retail markets. The physics of electricity means that
                      markets are typically regional in scope. Yet, the multi-state solutions
                      that are needed for restructuring to occur require a degree of
                      intergovernmental cooperation that has been difficult to achieve.
                      Uncertainties resulting from the restructuring’s bumpy path are
                      interfering with the overall financial health of the industry. Investors are
                      worried about cost recovery and future rates of return for independent
                      power producers, power marketing entities, and investor-owned
                      utilities. These problems have been amplified by the recent financial
                      collapse of several independent power companies and the recent
                      downturn in the economy.
                      Summary
                      North America’s world-class electric system is facing several serious
                      challenges. Major questions exist about its ability to continue providing
                      1
                          U.S. Department of Energy “Report to Congress: Impacts of the Federal Energy Regulatory Commission’s Proposal
                          for Standard Market Design” April 2003 DOE/S-0138
                      8                                  “Grid 2030” — A National Vision for Electricity’s Second 100 Years
citizens and businesses with relatively clean, reliable, and affordable
energy services. The recent downturn in the economy masks areas of
grid congestion in numerous locations across America. These
bottlenecks could interfere with regional economic development. The
“information economy” requires a reliable, secure, and affordable
electric system to grow and prosper. Unless substantial amounts of
capital are invested over the next several decades in new generation,
transmission, and distribution facilities, service quality will degrade and
costs will go up. These investments will involve new technologies that
improve the existing electric system and possibly advanced
technologies that could revolutionize the electric grid.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years        9
10   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
  3               FACTORS AFFECTING THE
                  FUTURE OF THE ELECTRIC
                  SYSTEM
Of the many factors shaping future conditions of the electric power
industry over the next 20 to 30 years, which will be the most important
“drivers” towards a modernized and expanded 21st century electric
system?
                                                          THE ELECTRIC POWER RESEARCH INSTITUTE’S
Public Policy Drivers                                     ELECTRICITY TECHNOLOGY ROADMAP
Electricity restructuring. One of the            One example of another electric system roadmap
                                                 effort.
most significant public policy drivers is
the continuing struggle over the
                                                 Difficult Challenges for Power Delivery and
restructuring of the industry.
                                                 Markets
Untangling the “restructuring knot” is
                                                 1. Increasing transmission capacity, grid control,
one of the premier public policy
                                                     and stability
challenges facing Federal, state, and            2. Improving power quality and reliability for
local energy and environmental policy                precision electricity users
makers. Many believe that new                    3. Increasing robustness, resilience and security of
                                                     the energy infrastructure
Federal electricity legislation is
                                                 4. Exploit the strategic value of energy storage
required, and for this reason                    5. Transforming electricity markets
proposals have been submitted in                 6. Creating the infrastructure for a digital society
every Congress since 1996, but                   7. Electric transportation
national consensus has yet to emerge.            8. Technology innovation in electricity use: a
                                                     cornerstone of economic progress
In the transition from regulated to
                                                 9. Advances in enabling technology platforms
market operations, the lack of overlap
between integrated planning of                   The roadmap is available at
generation and transmission siting               www.epri.com/corporate/discover_epri/
and market-based mechanisms to                   roadmap/index.html
incent positive investment behavior
has exacerbated grid congestion problems and led to poor generation
siting decisions. The lack of consensus regarding federal and state
jurisdiction in electricity regulations interferes with the expansion and
modernization of the grid. Changes in the regulatory framework are
needed to create a climate more favorable to risk taking and
entrepreneurism.
Environmental regulations. Another significant driver concerns the
regulation of the environmental, public health, and safety
consequences of electricity production, delivery, and use. This includes
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                  11
                      air pollution, greenhouse gas emissions, land use, and water impacts.
                      Finding ways to address public concerns, reduce the impact of new
                      infrastructure projects, and solve the “not-in-my-backyard” syndrome
                      is critical. Lowering unnecessary costs (time as well as money)
                      associated with overly complex, bureaucratic, and multi-jurisdictional
                      siting and permitting processes is also important. Reconciling
                      legitimate local land use and environmental concerns with the
                      imperative to meet electric deliverability and reliability standards
                      requires the rapid deployment of highly effective, unobtrusive, low-
                      environmental-impact grid technologies.
                      Historically, environmental requirements have been a source of
                      stimulus to the development of new post-combustion control
                      technologies to meet health and safety standards. However,
                      environmental regulations have neither rewarded nor stimulated new
                      approaches to efficiency. Today, finding ways to streamline
                      environmental requirements (without affecting stringency) may be a
“The aging of the     more effective means to stimulate stock turnover and the installation of
electric              new electricity technologies. Today’s air quality regulations are largely
infrastructure...     being met by the addition of scrubbers and other control technologies
could accelerate      on power plants. Greater use of market-oriented environmental
turnover of capital   policies can provide new revenue streams to enhance the return-on-
assets, including     investment in cleaner and more energy efficient technologies and
generation,           equipment.
transmission, and
                      National security. Concerns about national security policies and the
distribution
                      need to secure the electric system from threats of terrorism and extreme
facilities.”          weather events are affecting the future of America’s electric system. A
                      small number of very large generating plants are inherently more
                      vulnerable than a large number of smaller, widely distributed plants.
                      Electric infrastructure and information systems must be secure.
                      Techniques must exist for identifying occurrences, restoring systems
                      quickly after disruptions, and providing services during public
                      emergencies. Policy guidance is needed to clarify roles and
                      responsibilities among electric service providers, regulatory agencies,
                      customers, and law enforcement agencies.
                      Market Drivers
                      Competition. The ability of incumbent companies to respond to
                      increasing competition from new entrants is a critical driver
                      determining the future of the electric system. Restructuring of wholesale
                      markets has already created new business opportunities in competitive
                      electric power generation. Restructuring has led many utilities to divest
                      12                    “Grid 2030” — A National Vision for Electricity’s Second 100 Years
generation assets, agree to mergers and acquisitions, and diversify
their product portfolios. Cost cutting measures have included steep
reductions in research and development expenditures.
If and when restructuring takes hold, and the array of choices available
to customers increases, providers of distributed energy and demand-
side management technologies could see the markets for their
products and services grow.
Aging infrastructure. Another driver affecting the future of the electric
system is the retirement and replacement schedule for generation,
transmission, and distribution facilities. The aging of the electric
infrastructure coupled with demand increases and more stringent
environmental requirements could accelerate turnover of capital assets,
including generation, transmission, and distribution facilities. The
spread in the use of information technologies has accelerated product
cycle times in other sectors, and could do the same in the electric
industry.
Consumer demands. As markets become increasingly open to
competition, customer wants and desires will play an increasingly
stronger role in shaping investment decisions. Concerns about
environmental quality, public health, and safety can be seen in
customer preferences for renewable
energy and energy efficient products
and services. Customer interest in        WAMS
affordability, convenience, and on-       The Wide Area Measurement System (WAMS) is a
site control will also drive the design   smart, automatic network that applies real time
                                          measurements in intelligent, automatic control
and development of new electric
                                          systems to operate a reliable, efficient, and secure
systems. As a consequence, the
                                          electric transmission infrastructure. WAMS is in place
amount of and demand for consumer         in the West, where it continuously monitors grid
information will grow.                    performance across the power system. It provides
                                                        operators with high-quality data and analysis tools to
                                                        detect impending grid emergencies or to mitigate
Technology Drivers                                      grid outages. A prototype real time network will be
Information technologies.                               established in the Eastern interconnection, with
                                                        possibly a dozen measurement units feeding a data
Information technologies (IT) have
                                                        collection server by the end on this calendar year.
already revolutionized                                  Ultimately, WAMS will monitor the grid parameters in
telecommunications, banking, and                        real time, facilitate calculating locational margin
certain manufacturing industries.                       prices in real time to support market designs, and
Similarly, the electric power system                    assist in providing customer price transparency.
represents an enormous market for
the application of IT to automate various functions such as meter
reading, billing, transmission and distribution operations, outage
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                        13
                  restoration, pricing, and status reporting. The ability to monitor real-
                  time operations and implement automated control algorithms in
                  response to changing system conditions is just beginning to be used in
                  electricity. Distributed intelligence, including “smart” appliances, could
                  drive the co-development of the future architecture for
                  telecommunications and electric power networks, and determine how
                  these systems are operated and controlled. Data access and data
                  management will become increasingly important business functions.
                New materials. New scientific discoveries affect America’s electric
                system. For example, advances in the materials sciences are resulting
                in new conductors of electric power. Nanoscience is opening new
                frontiers in the design and manufacture of machines at the molecular
                level for fabricating new classes of metals, ceramics, and biological
                materials for industrial, computer, and medical applications. Advances
                in semiconductor-based power electronics have given rise to new
                                                  solutions that allow more power flow
HTS System Shatters Previous Records              through existing assets, while
                                                  respecting local land use concerns.
The U.S.
                                                  Desirable properties of new material
Department of
Energy and                                        for electricity conductors include
Southwire                                         greater current-carrying capacity,
Company                                           lower electrical resistance, lighter
have
                                                  weight, greater controllability, and
partnered in a
successful high                                   lower cost.
temperature
superconductivity                                   High temperature
(HTS) project near Atlanta, Georgia. The 100-foot,  superconductors. High temperature
3-phase HTS power cable system has been in
                                                    superconductors are a good example
operation since February 18, 2000. It is now
operating unsupervised, and Southwire estimates
                                                    of advanced materials that have the
that similar systems will be available on the marketpotential to revolutionize electric
in 2005.                                            power delivery in America. The
                             Source: Project Fact Sheet,
                                                    prospect of transmitting large
        http://www.eere.energy.gov/superconductivity/
                                                    amounts of power through compact
                  underground corridors, even over long distances, with minimal
                  electrical losses and voltage drop, could significantly enhance the
                  overall energy efficiency and reliability of the electric system, while
                  reducing fuel use, air emissions, and physical footprint.
                  Superconducting technologies can be used in generators, cables,
                  transformers, storage devices, synchronous condensors, and motors –
                  equipment that crosscuts the entire electric power value chain.
                   14                         “Grid 2030” — A National Vision for Electricity’s Second 100 Years
Electricity storage. Breakthroughs
                                                       Storage Facility Provides Reliable Power for Air Force
that dramatically reduce the costs of
                                                       Base
electricity storage systems could drive
revolutionary changes in the design                    The U.S. Department of Energy is collaborating with
                                                       the Tennessee Valley Authority (TVA) to collect and
and operation of the electric power
                                                       analyze data generated from a new Regenesys Energy
system. Peak load problems could be                    Storage System currently under construction in
reduced, electrical stability could be                 Columbus,
improved, and power quality                            Mississippi. When
                                                       completed, the plant
disturbances could be eliminated.
                                                       will store 120 MWh of
Storage can be applied at the power                    electricity during off
plant, in support of the transmission                  peak periods for
system, at various points in the                       support of a
distribution system, and on particular                 transmission line
                                                       feeding a major Air Force Base. The unit will provide
appliances and equipment on the
                                                       voltage support, supply extra power to cover high
customer’s side of the meter.                          summer peaks, and maintain critical loads at the base
                                                       during emergencies. The plant is expected to begin
Advanced power electronics.                            operation in the spring of 2004. This will be the first
High-voltage power electronics allow                   application of this technology in the U.S. A similar unit
                                                       is being constructed in Great Britain.
precise and rapid switching of
electrical power. Power electronics are
at the heart of the interface between energy storage and the electrical
grid. This power conversion interface—necessary to integrate direct
current or asynchronous sources with the alternating current grid—is a
significant cost component of energy storage systems. Additionally,
power electronics are the keystone to Flexible Alternating Current
Transmission Systems (FACTS), or power flow controllers, that improve
power system control, and help increase power transfer levels. New
power electronics advances are needed to lower the costs of these
systems, and accelerate their application on the network.
Distributed energy technologies. Developments to improve
distributed energy generation and combined heat and power systems
could expand the number of installations by industrial, commercial,
residential, and community users of electricity. Devices such as fuel
cells, reciprocating engines, distributed gas turbines and microturbines
can be installed by users to increase their power quality and reliability,
and to control their energy costs. They can lead to reduced “upstream”
needs for electric generation, transmission, and distribution equipment
by reducing peak demand.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                         15
16   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
   4              VISION OF THE FUTURE
                  ELECTRIC SYSTEM
         “Grid 2030” energizes a competitive North
       American marketplace for electricity. It connects
      everyone to abundant, affordable, clean, efficient,
       and reliable electric power anytime, anywhere. It
      provides the best and most secure electric services
                    available in the world.
This vision of the future electric system builds on the existing electric
infrastructure. The same types of equipment that the system uses for
electric delivery today - e.g., power lines, substations, and transformers
- will continue to play important roles. However, the emergence of new
technologies, tools, and techniques including distributed intelligence        “Grid 2030 is a
and distributed energy resources, will increase the efficiency, quality,      fully automated
and security of existing systems and enable the development of a new          power delivery
architecture for the electric grid. The result will be improvements in the    network...ensuring
efficiency of both power delivery and market operations, and a high-          a two-way flow of
quality network that provides secure sources of electricity to America.       electricity and
                                                                              information
Grid 2030 is a fully automated power delivery network that monitors           between the
and controls every customer and node, ensuring a two-way flow of
                                                                              power plants and
electricity and information between the power plant and the appliance,
                                                                              appliances and all
and all points in between. Its distributed intelligence, coupled with
                                                                              points in
broadband communications and automated control systems, enables
                                                                              between.”
real-time market transactions and seamless interfaces among people,
buildings, industrial plants, generation facilities, and the electric
network.
Technological breakthroughs in superconductivity have made it
possible to deliver large amounts of energy over long distances into
congested areas unobtrusively, with near-zero voltage drop. New
conductor materials enable two to three times the power through
existing rights-of-way. Advances in energy storage and demand-side
management technologies have virtually eliminated peak-load
problems. Economic losses from power outages and power quality
disturbances are extremely rare (never caused by electric resource
constraints), and customers routinely obtain electricity services at
reliability and quality levels tailored to their individual needs with
greatly reduced environmental impacts.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years       17
                                                                              Workably competitive markets are in
                CONCEPTUAL DESIGN OF THE                                      place at wholesale levels and
                  “GRID 2030” VISION1                                         customers widely acknowledge the
                                                                              resulting benefits. Effective public
                                                                              oversight and well-designed markets
                                                                              ensure that market power problems
                                                                              are kept to a minimum. Electric
                                                                              transmission and distribution operates
                                                                              under a consistent and stable set of
                                                                              regulations, which rely on
                                                                              performance-based principles and
                                                                              involve Federal and state agencies,
                                                                              multi-state entities, voluntary industry
                                                                              associations, and public interest
    National Electricity Backbone for Coast-to-Coast
                                                                              groups to enforce proper business
                     Power Exchange
                                                                              practices and ensure consumer
                                                                              protection.
                                                                              The Grid 2030 workforce draws from
                                                                              the Nation’s best scientists, engineers,
                                                                              technicians, and business
                                                                              professionals. Workplaces are safe,
                                                                              and workers enjoy rewarding careers
                                                                              in high-paying jobs.
                                                                              Grid 2030 consists of three major
                                                                              elements:
    Electricity Backbone Plus Regional Interconnection
                                                                               A national electricity “backbone”
                                                                               Regional interconnections, which
                                                                                include Canada and Mexico
                                                                               Local distribution, mini- and micro-
                                                                                grids providing services to
                                                                                customers and obtaining services
                                                                                from generation resources
                                                                                anywhere on the continent
Electricity Backbone, Regional Interconnection, Plus                          National Electricity Backbone
      Local Distribution, Mini- and Micro-Grids
                                                                              High-capacity transmission corridors
1
     These are examples for illustrative purposes. The first phase of the     link the east and west coasts, as well
     Electric Delivery Technologies Roadmap will be to design the
     architecture of the “Grid 2030” vision.                                  as Canada and Mexico. It is possible
                                                                              to balance electric supply and demand
                           18                                   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
on a national basis. This gives customers “continental” access to
electricity supplies, no matter where they or their suppliers are located.
The national electricity backbone enables expanded distribution of
electricity from:
 Efficient generation from a multitude of sources, serving customers
  in a non-discriminatory manner, and
 A more efficient system that can take advantage of seasonal and
  regional weather diversity on a national scale, including demand-
  side management
The backbone system consists of a variety of technologies. These
include controllable, very-low-impedence superconducting cables and           “Superconducting
transformers operating within the synchronous AC environment; high            systems…are
voltage direct current devices forming connections between regions;           seamlessly
and other types of advanced electricity conductors, as well as                integrated with
information, communications, and controls technologies for supporting         high voltage direct
real-time operations and national electricity transactions.                   current systems
Superconducting systems reduce line losses, assure stable voltage, and        and other
expand current carrying capacities in dense urbanized areas with a            advanced
minimal physical footprint. They are seamlessly integrated with high          conductors for
voltage direct current systems and other advanced conductors for              transporting
transporting electric power over long distances.                              electric power over
Advanced materials such as high temperature diamond materials
                                                                              long distances.”
could be applied to the transmission, distribution, and control of
electricity. Diamond technology could replace silicon and yield
revolutionary improvements in current density.
The cryogenc equipment used for achieving superconductivity in
electric transmission is available for other purposes, such as the
conversion of hydrogen gas into liquid form. Liquid hydrogen is one of
the long-distance transport options for the hydrogen economy. With
electricity, hydrogen is the second main energy carrier for the economy.
Coupling the development of advanced electricity and hydrogen
technologies lowers overall infrastructure costs.
Regional Interconnections
The national backbone is connected with two major North American
regional interconnections: East and West. Power from the backbone
system is distributed over regional networks. Long-distance
transmission within these regions is accomplished using upgraded,
controllable AC facilities and, in some cases, expanded DC links.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years       19
                          High-capacity DC interties are employed to link adjacent,
                          asynchronous regions. Regional system planning and operations
                          benefit from real-time information on the status of power generation
                          facilities (central-station and distributed) and loads. Expanded use of
                          advanced electricity storage devices address supply-demand
                          imbalances caused by weather conditions and other factors. Markets
                          for bulk power exchanges will operate efficiently with oversight
“Real-time                provided by multi-state entities and voluntary industry entities.
monitoring and
information               Local, Mini- and Micro-Grids
exchange                  The nation’s local distribution systems are connected to the regional
enables markets           networks, and through that to the national electric backbone. Power
to process                from distributed energy facilities flows to and from customers and into
transactions              the regional network, depending on supply and demand conditions.
instantaneously           Real-time monitoring and information exchange enables markets to
and on a                  process transactions instantaneously and on a national basis.
national basis.”
                           Customers have the ability to tailor electricity supplies to suit their
                           individual needs for power, including costs, environmental impacts,
                           and levels of reliability and power quality. Sensors and control systems
                           link appliances and equipment from inside buildings and factories to
                                                             the electricity distribution system.
                                                             Advances in distributed power
       Grid-Friendly Appliance Controller                    generation systems and hydrogen
       Pacific Northwest National Laboratory has             energy technologies enable the dual
       developed a device, based on the gate array chip,     use of transportation vehicles for
       commonly found in cell phones, that monitors line
                                                             stationary power generation. For
       frequency, detects dips, and provides the means to
                                                             example, hydrogen fuel cell powered
       trip a load in a graceful manner. Installed in
       refrigerators, air conditioners, water heaters and    vehicles provide electricity to the local
       various other household appliances, this device       distribution system when in the garage
       would monitor the power grid and turn appliances      at home or parking lot at work.
       off for a
       few               Grid-Friendly Appliance Controller
       seconds to                                                   Potential Benefits
       a few
                                                                    There are a number of ways in which
       minutes in
       response
                                                                    Grid 2030 will benefit the American
       to power                                                     economy, environment, national
       grid                                                         security, and people.
       overload.
       By triggering appliances to turn on and off at               An expanded and modernized grid
       different times, this device could help control power
                                                                    will eliminate electric system
       oscillations that occur in different parts of the grid.
       Grid Friendly™ appliances reduce some of the load            constraints as an impediment to
       on the system to balance supply and demand.                  economic growth. Robust national
                                                                    markets for electric power transactions
                          20                          “Grid 2030” — A National Vision for Electricity’s Second 100 Years
will encourage growth and open
avenues for attracting capital to                       Integrated Distribution Systems
support infrastructure development                      RealEnergy of Woodland Hills, California, has
and investment in new plant and                         developed an enterprise-wide distributed
equipment. New business models will                     generation management system that balances
                                                        system integration, communications, metering,
emerge for small and large
                                                        billing, monitoring, alarming, and control with
companies in the provision of a wide                    equipment run-time allocations, thermal and
variety of new products and services                    electric storage requirements, power flows, and the
for electricity customers, distributors,                real-time valuation of grid services. The system
transmitters, and generators.                           addresses the integration and management of
                                                        distributed power technologies in a virtual utility
                                                        structure interconnected to the grid.
More energy efficient transmission
and distribution will reduce line losses
and lower combustion of fossil fuel and emission of air pollution and
greenhouse gases. More economically efficient system operations and
the expanded use of demand-side management techniques will reduce
the need for spinning reserves, which might also lower environmental
impacts. A modernized national electric grid will facilitate the delivery
of electricity from renewable technologies such as wind, hydro, and
geothermal that have to be located where the resources are located,
                                                                                               “Electricity
which is often remote from load centers.
                                                                                               consumers —
Faster detection of outages, automatic responses to them, and rapid
                                                                                               from factory
restoration systems will improve the security of the grid, and make the                        and business
grid less vulnerable to physical attacks from terrorists. Greater                              managers to
integration of information and electric technologies will involve                              homeowners
strengthened cyber-security protections. Expanded use of distributed                           and small
energy resources will provide reliable power to military facilities, police                    business
stations, hospitals, and emergency response centers. This will help                            operators — will
ensure that “first-responders” have the ability to continue operations                         have the ability
even during worst-case conditions. Greater use of distributed                                  to customize
generation will lessen the percentage of generated power that must                             their energy
flow through transmission and distribution systems. Higher levels of                           supplies to suit
interconnection with Canada, Mexico, and ultimately other trading                              their individual
partners will strengthen America’s ties with these nations and boost                           needs.”
security through greater economic cooperation and interdependence.
As a result, Grid 2030 will enable a more prosperous, healthier, and
secure quality of life for all Americans. The range of choice in electricity
will expand. Electricity consumers — from factory and business
managers to homeowners and small business operators — will have
the ability to customize their energy supplies to suit their individual
needs. More open and workably competitive markets for electricity will
help to control cost increases and ensure high quality services.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                        21
22   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
  5                ACHIEVING THE VISION
               Progress toward achieving the vision will proceed through
               three main phases. Phase I involves progress in research,
development, and demonstration of advanced technologies. It also
includes efforts to clarify and modernize the regulatory framework.
Phase II involves turnover of the capital stock of electric assets and
replacement with advanced systems. It also involves local and regional
deployment of Grid 2030 concepts and equipment. Phase III involves
the extension of local and regional deployment of Grid 2030 to
national and international markets.
A SAMPLE OF POTENTIAL PRODUCTS AND SERVICES MADE POSSIBLE BY PROGRESS TOWARD
THE VISION
               By 2010                                By 2020                              By 2030
     Customer "gateway" for the next         Customer "total energy" systems      Highly reliable, secure, digital-
     generation "smart meter", enabling      for power, heating, cooling, and     grade power for any customer
     two-way communications and a            humidity control with "plug&play"    who wants it
     "transactive" customer-utility          abilities, leasable through
     interface                               mortgages                            Access to affordable pollution-
                                                                                  free, low-carbon electricity
     Intelligent homes and appliances        "Perfect" power quality through      generation produced anywhere in
     linked to the grid                      automatic corrections for voltage,   the country
                                             frequency, and power factor
     Programs for customer participation     issues                               Affordable energy storage devices
     in power markets through demand-                                             available to anyone
     side management and distributed         HTS generators, transformers,
     generation                              and cables will make a significant   Completion of a national (or
                                             difference                           continental) superconducting
     Advanced composite conductors                                                backbone
                                             Long distance superconducting
     for greater transmission capacity
                                             transmission cables
     Regional plans for grid expansion
     and modernization
Grand Challenges
A number of grand challenges need to be overcome to achieve this
vision of the future electric system. The industry has historically had a
monopoly structure that is slow to change with cultural attitudes
marked by built-in institutional inertia. Uncertainty about the future has
made it difficult for the industry to attract capital investment recently for
new construction.
Additionally, technological innovation in the equipment that comprises
the electric infrastructure has been somewhat stagnant in recent years.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                          23
CHALLENGES TO ACHIEVING THE VISION
                                     Developing              Finding        Addressing          Developing
   Overcoming        Attracting
                                       Better              Profitable      Customer and         Better Public
     Inertia         Resources
                                    Technologies        Business Models    Public Needs           Policies
    Fragmented        Capital       Unobtrusive            Monetizing         Demand-side        Federal-state
    industry          investment    power lines            revenue            participation      cooperation
    subject to                                             streams            in power
    balkanization     Education,    Lower cost                                markets            Market power
                      training,     storage                Matching                              of incumbent
    Embedded          and                                  rewards            Workably           suppliers
    value of          development   Long distance          to risks           competitive
    capital assets    of            superconductivity                         market             Public
    Low level         America’s                            Testing            designs            purpose
    of RD&D           workforce     Clean power            Versions 1.0                          programs
    spending                        generation                                NIMBY
                                                                                                 Stable
    Attitudes                       Real-time                                                    regulatory
    resistant to                    information                                                  framework
    change                          systems
                                                                                                 Sustained
    Slow turn-                      Advanced                                                     RD&D
    over of the                     composite                                                    funding
    capital stock                   conductors
    Lack of
    success in
    some markets
                     There is a need to develop and deploy advanced technologies to move
                     the industry from the electro-mechanical to the digital age.
                     Unfortunately, the electric industry is among the lowest in allocating
                     spending to research, development, and demonstration programs.
                     New entrants into the market (e.g., independent power companies,
                     energy service companies, distributed energy providers, and demand-
                     side management businesses) need the incentives provided by
                     regulatory certainty and properly operating markets in order to realize
                     the necessary revenue streams that will ensure an optimal level of
                     infrastructure investment. Such an environment will sustain profitable
                     business models and lead to the best model that benefits consumers.
                     The current regulatory framework is not providing a stable business
                     climate. It is not conducive to attracting capital investment, consistent
                     across the country, or consistently effective in addressing public
                     purposes for environmental and consumer protection.
                     24                       “Grid 2030” — A National Vision for Electricity’s Second 100 Years
Strategic Goals
Achieving the vision requires progress be made between now and
2030 on a number of important strategic goals.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years   25
GOALS TO ACHIEVE THE VISION
                                                                       Demand-Side                Regulatory
           Transmission                    Distribution
                                                                       Management                 Framework
                                                  Phase I - By 2010
    Prove feasibility of                Distributed intelligence      Demand-side              National legislation
    superconducting backbone            feasibility proven            management               clarifies jurisdiction
                                                                      programs more            issues
    Coordinated regional                Remote outage                 widely used
    planning and operations             detection in place                                     Public-private RD&D
                                                                      Smart appliance          partnership flourish
    Real time information               Plug&play protocols           feasibility proven
    transparency for all                for DG/DR                                              Workable markets
    grid operators                                                    Greater use of           achieved for all
                                        Architecture defined          customer side            sectors and regions
    Multiple 10 mile lengths of         for intelligent               DG/CHP
    superconducting cables              automated systems                                      Adequate public
    deployed                                                                                   subsidies ensure
                                        Improved utilization                                   universal service
    Advanced planning and initial       and lower costs
    deployments for the first                                                                  States resolve
    superconducting “power-hubs”                                                               performance-based
    in congested areas                                                                         regulation, metering,
                                                                                               and pricing issues
    Smart, automated, grid
    operation prototype
    Majority of new transmission
    lines are composite conductors
                                                 Phase II - By 2020
    Half the power in the U.S.          DG/DR technologies            All appliances           Stable, equitable
    flows over smart grid               fully integrated in           have smart               regulatory framework
                                        distributed operations        capabilities             in place
    Long distance superconducting
    cables installed; “power hubs”      Intelligent automated         Large and small          Workably competitive
    operational in several              architecture deployed         customers have           markets wherever
    metropolitan areas                                                access to power          feasible
                                        Real-time, two-way            markets and real-
    Average grid losses reduced         flow of information           time information
    by 50%                              and power                     and controls
                                                 Phase III - By 2030
    Superconducting backbone            Low-cost, small-scale         Fully automated
    installed with fault limiters and   storage                       demand response
    transformers
                                        Superconducting cables        Low cost onsite
    Two regional networks               and equipment                 storage deployed
                                        deployed
    100% of power flows                                               Fully interconnected
    through smart grid                                                customers and
                                                                      electric networks
                       26                           “Grid 2030” — A National Vision for Electricity’s Second 100 Years
  6               PATH FORWARD
              For significant progress toward a modernized and
              expanded electric system to occur, a stronger public-
private partnership needs to form and spring into action immediately.
Partnership activities aimed at technology development will need to be
expanded to address the full set of national needs.
A useful mechanism for guiding these
expanded activities is the                               GRID 2030
collaborative development of a
National Electric Delivery Technologies
Roadmap. This roadmapping process
will build on existing efforts by the
Electric Power Research Institute,
National Rural Electric Cooperative
Association, Gas Technology Institute,
California Energy Commission, New
York State Energy Research and
Development Authority, and others,
including National Laboratories,
Universities, and other Federal
agencies such as the Department of
Defense, National Institute of
Standards and Technology, National Science Foundation,
Environmental Protection Agency, Tennessee Valley Authority, and the
Department of Energy’s Power Marketing Administrations.
The National Electric Delivery Technologies Roadmap process can be
used to identify near-, mid-, and long-term actions and set priorities for
research, development, and demonstration programs. It can outline
the respective roles of Federal and state government agencies, utilities,
equipment manufacturers, trade associations, professional societies,
universities, National laboratories, environmental organizations, and
other non-governmental organizations. International issues and
opportunities can be addressed, including those associated with
operating the North American grid with Canada and Mexico, and
international trade with partner nations overseas.
The scope of the roadmap process will focus on electricity delivery
technologies. Power generation and end-use efficiency technologies
have ongoing technology roadmaps and public-private partnerships.
Coordination with these complementary efforts will be paramount.
“Grid 2030” — A National Vision for Electricity’s Second 100 Years      27
                    Information from the roadmap could be used by the Federal Energy
                    Regulatory Commission and state public utility commissions to address
                    regulatory framework issues. Specific areas to address in electric
“Working            delivery technologies include:
together, a
                     Advanced conductors
willing coalition
of industry,         Electric storage
universities,
non-                 Sensors and controls
governmental
organizations,       Distributed intelligence
and Federal and
                     Information and communication
state
government           Advanced materials
agencies can
help make Grid       Data acquisition, visualization, and simulation modeling
2030 a reality.”
                     Advanced power electronics
                    Working together, a willing coalition of industry, universities, non-
                    governmental organizations, and Federal and state government
                    agencies can help make Grid 2030 a reality. Greater cooperation is
                    needed to address the regulatory framework, capital investment, and
                    technology development. Through this vision, and the subsequent
                    technology roadmap, the U.S. Department of Energy’s Office of Electric
                    Transmission and Distribution is eager to assist in a national effort to
                    modernize and expand America’s electric delivery system.
                    28                   “Grid 2030” — A National Vision for Electricity’s Second 100 Years
APPENDIX – PARTICIPATING
ORGANIZATIONS
              ABB Inc., John Sullivan                          Cornell University,
                                                               Robert J. Thomas
              ALSTOM EAI Corp., Ali
              Ipakchi, Alain Steven                            Edison Electric Institute,
                                                               Lynn LeMaster, Larry
              American Electric Power,                         Logan
              Glenn Files
              American                                         Vikram Budhraja
              Superconductor, John
              Howe, Gregory Yurek                              Electric Power Research
                                                               Institute, Clark Gellings
              American Transmission
              Company, William                                 Electric Power Supply
              Burlew, Jose Delgado                             Association, Lynne
                                                               Church
              Apogee Interactive, Joel
              Gilbert                                          Electricity Innovation
                                                               Institute (E2I), T. J.
              Bonneville Power                                 Glauthier
              Administration, Allen
              Burns                                            Exelon Corp., Betsy
                                                               Moler, Steven Nauman
              California Energy
              Commission, Terry Surles                         Federal Energy
                                                               Regulatory
              Carroll Consulting, Peter                        Commission, Pat Wood
              Carroll
                                                               Gas Technology
              Cimetrics Inc., James Lee                        Institute, John Kelly
              CISCO Systems, Louis                             GE Power Systems,
              Schmidt                                          Hamid Elahi
              Consultant and former                            Harvard Electricity
              Montana PUC                                      Policy Group, Ashley
              Commissioner, Bob                                Brown
              Anderson
“Grid 2030” — A National Vision for Electricity’s Second 100 Years                      29
     IBM Corporation,                              Private Power L.L.C.,
     David Samuel                                  Tom Casten
     International                                 PSEG Power L.L.C.,
     Brotherhood of                                Frank Cassidy
     Electrical Workers,
     James Dushaw,                                 Reason Foundation/
     Elizabeth Shuler                              Northwestern University,
                                                   Lynne Kiesling
     National Association
     of Regulatory Utility                         RockPort Capital
     Commissioners,                                Partners, Chuck
     Andrew Spahn                                  McDermott
     National Rural Electric                       S&C Electric Company,
     Cooperative                                   Bradford Roberts
     Association, Glenn
                                                   Sandia National
     English, David Mohre
                                                   Laboratories, Samuel
     North American                                Varnado
     Electric Reliability
                                                   Sempra Energy
     Council, Michehl Gent
                                                   Solutions, Robert
     Northeast Utilities,                          Dickerman
     Michael Morris
                                                   Siemens Corporation,
     Northeast-Midwest                             Doug Todd
     Institute, Suzanne
                                                   Siemens Power
     Watson
                                                   Transmission &
     Nxegen Inc., Erik                             Distribution Inc. , Dave
     Bartone                                       Pacyna
     Oak Ridge National                            Southern California
     Laboratory, R.G.                              Edison, Richard
     Gilliland, William                            Rosenblum
     Madia
                                                   Southern Company,
     Office of U.S. Senator                        Andrew Dearman,
     Feinstein, Thomas R.                          Stuart Thorn
     Schneider
                                                   Tennessee Valley
     PJM Interconnection,                          Authority, Terry Boston
     Phillip Harris
30                “Grid 2030” — A National Vision for Electricity’s Second 100 Years
           The Athena Institute,
           Jesse Berst
           Trans-Elect’s NTD, Bob
           Mitchell
           U.S. Department of
           Energy, Robert Card,
           James Glotfelty, Kyle
           McSlarrow
           UTC Power, Jan van
           Dokkum
           Verizon, Jan Deur
           Waukesha Electric
           Systems, Nancy
           Dickman
Energetics Facilitation Team
Joseph Badin
MaryLee Blackwood
Jan Brinch
Tara Nielson
Rich Scheer, Team Leader
Invited but unable to attend:
American Public Power Association
Natural Resources Defense Council
New York Public Service Commission
“Grid 2030” — A National Vision for Electricity’s Second 100 Years   31
32   “Grid 2030” — A National Vision for Electricity’s Second 100 Years