The intersection of decarbonization and reliability on the grid will be a defining issue for the energy industry to grapple with in the upcoming months and years, according to industry officials and experts.

PJM stakeholders heard some of the conflicts fleshed out at Tuesday’s annual Meeting of Members, as speakers talked about the pressing issues of state policies on green energy going up against the RTO’s mandate to maintain the reliability of the grid for all customers.

Manu Asthana, PJM president and CEO, said the convergence of decarbonization policies and grid security needs to be answered in the near future by stakeholders. Asthana said the issue is not as easy as simply dismissing the challenges of addressing reliability or discounting public policies addressing decarbonization. Finding solutions is going to require selecting a path “based on the best collective thinking” of PJM and its members.

“This topic is squarely in our strategic fairway, and it’s a topic without pat, easy answers,” Asthana said.

3D Transformation

Jim Robb, NERC CEO and keynote speaker of Tuesday’s event, said the “evolving nature of the grid” remains at the top of mind for his agency. Robb said NERC has learned hard lessons over the last year of how the grid operates, indicating that it’s “not our grandfather’s electric system” as it exists today. He described the evolving grid as a “3D transformation” involving decarbonization, distributed and digitization.

The increase in renewable generation is being driven by the “improving economics” of the technology and the environmental priorities of states regarding power generation, Robb said, while the expansion of variable resources is “really straining the way” regulators, politicians and stakeholders have to think about resource adequacy.

In the past, Robb said, capacity on the grid was one of the main issues the industry focused on, but decarbonization goals and intermittent resources have significantly changed the way system operators like PJM need to approach their business. Robb said the past generation model featured a fixed set of assets that were fairly predictable, but now the changing technology and green energy mix has created a “topsy-turvy” set of issues.

“It’s become painfully clear that capacity is now necessary but no longer sufficient,” Robb said. “We really have to have our eyes on energy and the ability to serve load.”

Much of the generation being built is also going on the distribution system, driven by the improvements in solar generation economics and creating an industry where the “bright line” between bulk power and distribution is darkening.

Finally, Robb cited the “explosion” of the internet of things in devices in people’s homes. The digitization revolution also includes the sophisticated energy management systems large industrial customers are installing to manage their own energy loads, Robb said, along with devices such as dynamic line ratings and smart meters.

These devices are “vastly improving our visibility” into the system and uncovering new ways to operate the system more efficiently, Robb said, but those improvements come with a price: A digital world in the electrical system poses a “great risk” for cyberattacks by adversaries and other bad actors.

Robb pointed to several digital supply-chain compromises in the last six months, including the SolarWinds hacking event revealed in December that compromised government systems. (See FERC Pushes Cybersecurity Incentives.)

“One of the things we’ve learned in the last year is how capable our adversaries are,” Robb said.

The three D’s are “really starting to strain” against the environment in which it operates, Robb said, as severe weather events have pushed the system to or past the breaking point. He said the operating environment is becoming more challenging and is “aggravated by the resource mix” that is being built.

Robb said last summer’s load shed event in California involving CAISO’s inability to import power to balance the resource showed a weakness in the system. (See CAISO: Blackouts May Continue, Calls Emergency Meetings.)

The severe cold snap in Texas and the Midwest in February proved to be a similar problem “on a much more dramatic scale,” Robb said, as the severe weather took out an exceptional amount of generation at a time when the load was growing “exponentially.”

Robb said it was “stunning” to learn that ERCOT’s load during the emergency would have exceeded their August peak if all the generation had been able to operate. He said NERC is investigating the Texas event, but he said the headline will probably end up being gas-electric coordination issues.

“Who would have ever thought of Texas having a winter peak?” Robb said. “It was an extraordinary failure of the system that also exposed the extraordinary interdependence of the system with the fuel supply.”

NERC is taking actions to make sure a similar event like Texas doesn’t happen again, Robb said, making development of the cold weather standard and weatherization standard “a priority.” After Texas, staff started working on a standard to send to the NERC Board of Trustees in June for approval. (See NERC Cold Weather Standards Headed to Final Ballot.)

Robb also pointed to the need for more transmission and other infrastructure to be built, saying the near future could be the “golden age of transmission” by getting more stakeholders talking and excited about the possibilities.

“As we see the industry move towards the more variable resource mix, we think investment in transmission, as well as natural gas infrastructure, is going to be required to provide the resilience that the system needs,” Robb said.

Near- and Long-term Issues

Patricia Hoffman, principal deputy assistant secretary of the U.S. Department of Energy’s Office of Electricity, said the country is at a “critical junction.” Challenges facing the energy industry include the fragility of the grid and where best to place energy investments in the future.

The significant increase in renewable energy added to the system in the next decade and beyond is forcing stakeholders to contemplate how best to adapt the system to the new energy mix, Hoffman said, and at the same time it’s becoming clearer that a significant amount of transmission will be needed to handle the new energy mix.

Hoffman said near-term issues that need to be addressed include increasing transmission capacity on the existing system, whether through reconductoring lines or DLRs. As interconnection issues become more in focus with the amount of renewable projects in the queue, Hoffman said, stakeholders may need to take another look at cost allocation for clean energy operators looking to interconnect.

Hoffman said the energy industry also needs to continue to build capacity and capability while figuring out where the stresses are on the system.

“At the end of the day, we need a significant amount of transmission,” Hoffman said. “So we should think about how we want to characterize transmission buildout and allocation of costs moving forward.”