The Digitalization / Electrification Nexus - The Changing Role of Data in the Distribution Utility
- 1. woodmac.comTrusted intelligence GTM Forum: The Digitalization / Electrification Nexus Ben Kellison Director, Grid Edge Ben.Kellison@woodmac.com
- 2. woodmac.comTrusted intelligence 1. Does transport electrification offer hope for load growth in the United States? 2. Will broader electrification deliver? 3. What impact will electrification have on the distribution grid? 4. How can utilities connect their digitalization efforts with electrification?
- 3. woodmac.comTrusted intelligence Does transport electrification offer hope for significant load growth? 1
- 4. woodmac.comTrusted intelligence After considering energy efficiency and distributed generation, national load growth is expected to remain tempered Source: Wood Mackenzie Power & Renewables -90 -60 -30 0 30 60 90 120 150 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 NetTWhofDemand BAU EE DG Net load change from previous year, 2019-2040
- 5. woodmac.comTrusted intelligence Electrification of transport reverses the downward trend late in the forecast to allow growth to exceed 1% by 2040 WoodMac’s base case includes 16% load growth from 2019 to 2040 Source: Wood Mackenzie Power & Renewables -80,000 -60,000 -40,000 -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 NetTWhofDemand BAU EV EE DG Net Energy
- 6. woodmac.comTrusted intelligence When specifically looking at the East Coast, the story changes as the demand shifts downward throughout the period in spite of additional EV load Source: Wood Mackenzie Power & Renewables -400 -300 -200 -100 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 NetLoad(TWh) Business As Usual Distributed Generation Electric Vehicles Energy Efficiency Net Load
- 7. woodmac.comTrusted intelligence Will broader electrification deliver?2
- 8. woodmac.comTrusted intelligence Decarbonization policies that target the broader economy could drastically alter the base case. Source: Wood Mackenzie, EIA, EPA -50% -25% 0% 25% 50% 75% 100% 2000 2008 2016 2024 2032 2040 PercentaboveorbelowINDCGoals Electrification Gap: The road to meeting economy-wide INDCsPower Sector Non-Power Sector (Transport, Industrials, ResCom) How could we decarbonize? • Power system is progressing through fuel switching, coupled with renewable and battery storage growth • Transport opportunities are beginning to become economically viable • Industrial processes and heating offer some electrification opportunities, but remain challenging The power sector’s decarbonization record positions it well for to benefit
- 9. woodmac.comTrusted intelligence Modeling stronger decarbonization goals and technological change leads to a greater impact of electrification on overall load growth EPRI’s modelling suggests up to 52% load growth over 35 years. Source: Electric Power Research Institute
- 10. woodmac.comTrusted intelligence If electrification is not significantly impacting load growth, what is its impact? 3
- 11. woodmac.comTrusted intelligence Americans continue to favor BEVs over PHEVs creating more need to charging optionality. Source: Wood Mackenzie Power and Renewables, InsideEVs.com of EVs sold in 2018 were battery electric vehicles, up from 51% in 2017. 64 Percent passenger electric vehicles will be on US roads by 2023. 4.75 Million public chargers in the United States in 2023, a 283% increase from end of year 2019. 454 Thousand
- 12. woodmac.comTrusted intelligence Peaky demand from fast- or coincident-charging, and changing customer attitudes toward electricity supply represent major challenges for distribution utilities California weekday EV charging profile, 2025 Source: California Energy Commission and NREL Transport electrification creates new risks
- 13. woodmac.comTrusted intelligence SAIDI has remained steady as major events outage minutes increased 30% from 2016 to 2017 and nearly 80% since 2014 nationwide. Customers are experiencing the impact of severe weather Source: Energy Information Administration 286 375 139 0 50 100 150 200 250 300 350 400 2013 2014 2015 2016 2017 OutageMinutes SAIDI w/ Major Events SAIDI 30% increase
- 14. woodmac.comTrusted intelligence Storms have pushed 30 states over 300 SAIDI minutes at least once between 2013 and 2017 Number of years SAIDI eclipsed 300 minutes by state, 2013-2017 Source: EIA, Wood Mackenzie Power & Renewables 1 year 5 years 2 years 3 years 4 years Legend > 1000 SAIDI
- 15. woodmac.comTrusted intelligence How can utilities connect their digitalization efforts with electrification? 4
- 16. woodmac.comTrusted intelligence 1. Build IoT capabilities into legacy and new DER programs. 2. Develop IT solutions and processes to forecast DER adoption, plan integration and operate the system more efficiently. 3. Continue to target grid modernization investment to improve storm resiliency and DER integration.
- 17. woodmac.comTrusted intelligence Two-way communications and forecasting are key to maintaining system-, feeder- or event lateral-wide energy balance 32 GW of resources offer system flexibility with ICT upgrades in ISO territories alone Source: Wood Mackenzie Power & Renewables “US Wholesale DER Aggregation” 41% 35% 8% 5% 5%4% 2% 32 GW Manufacturing Batteries HVAC Water Heaters Lighting Misc. Loads Generator Growth opportunities EV charging A lot of batteries Connected home Microgrids Resource mix today
- 18. woodmac.comTrusted intelligence An early example indicates 10% of customers in California good candidates for managed charging programs Source: California Public Utility Commission 10% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0 20 40 60 80 2012 2013 2014 2015 2016 2017 %ofcustomerswithEVinprogram #ofcustomers('000s) Single-family separate meter Single meter % of EV Drivers on EV rate % on single metered EV rate and participating in a DR program % on Separate Metered EV rate California IOU EV customer program enrollment rates
- 19. woodmac.comTrusted intelligence • Offering a free or discounted, home level 2 charger with enrollment into its Wi-Fi enabled “Scheduled Charging Program” • Allows utility to “set the charger to charge at Level 1 rate (1.25 kW)” during peak periods for the distribution grid (between 5 pm and 9 pm) • No mention of curtailment or Level 2 charging rate, only the incentive, the peak period, and the benefit to the general ratepayer Some utilities are becoming creative to both create incentives for EVs and limit the potential strain on the grid - 8 municipal distribution companies participating - Supplying power to 60,000 customers
- 20. woodmac.comTrusted intelligence Digitalization is required to enable safe and flexible operation of DER and low- cost upgrades of utility grids Source: Wood Mackenzie Power and Renewables Utility DER Lifecycle Management Process
- 21. woodmac.comTrusted intelligence As grid modernization spending on hardening and systems increases planning capabilities will be key to ensure capital investments are future-proof. US large utility distribution spend, 2007-2017 Source: FERC Form 1 0 5 10 15 20 25 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 BillionsofDollars(USD) Overhead Conductors and Devices Underground Conductors and Devices Station Equipment Poles, Towers, and Fixtures Line Transformers Meters Services Underground Conduit Street Lighting and Signals Systems Structures and Improvements Installations on Customer Premises Storage Battery Equipment Land and Land Rights Leased Propergy on Customer Premises Asset Retirement Costs for Distribution Plants 6.7% CAGR
- 22. woodmac.comTrusted intelligence Thank You! Ben Kellison Director, Grid Edge Ben.Kellison@woodmac.com