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Pitch

The world spends billions of dollars upgrading the electric grid. If allowed to compete, clean energy can improve the grid more cheaply.


Description

Summary

Opportunity: Every year the world spends hundreds of billions of dollars ensuring that electricity can be reliably and affordably transported from power stations to end users. Until recently, it was assumed that the only way to achieve this was through capital investments in the transmission and distribution system. 

But some of the lowest carbon energy solutions, like roof top solar, energy efficiency, energy storage, micro-grids, demand response, and electric vehicles, can reduce the need for these grid investments. These techologies are collectively called distributed energy resources (DERs) because they are distributed on the edges of the electric grid, close to the homes and business that use the energy or energy services provided by them.

Utilities are already using them to reduce traditional grid investments. For example, Consolidated Edison (New York State's Largest Utility) is saving $500 million in substation upgrades by investing in DERs. 

The Consolidated Edison example shows that society can deploy much larger amounts of low carbon DERs if we allow them to compete with traditional grid investments. But this will require careful planning and determining fair prices for DERs. 

The Solution: Currently there is no coordinated approach to deployment of DER. As a result nobody knows what DERs have been deployed on the distribution grid or where. A centralized entity that coordinates between grid planers and DER providers, and ensures that DER providers get compensated when they are used to avoid major capital expenditures on transmission and distribution systems could unlock billions of dollars in new revenue for low carbon energy. 


Category of the action

Reducing emissions from electric power sector.


What actions do you propose?


Who will take these actions?


Where will these actions be taken?

Short term (1-5 years): Similar changes are already under development in California and New York. However, they could also be deployed in just about any state in the US with broad smart meter deployment. For example, Pennsylvania, Washington DC, Vermont, or Maryland. In states with low smart meter penetration, these measures could still be deployed but it would require more involvement with the whole sale market and transmission planners.

Midterm (6-15 years): Spread to other states, and begin adoption in OECD countries. 

Long term (16-25 years): Most developing countries currently lack the institutions necessary to manage these markets with the necessary transparency. Some of the middle income countries like China, India, Thailand, Malaysia, and Brazil may have progressed within the long-term time frame to begin to adopt some of these principles.


How much will emissions be reduced or sequestered vs. business as usual levels?


What are other key benefits?


What are the proposal’s costs?


Time line


Related proposals


References