In the ‘Open Grid,’ Dispersed Grid Control Puts Utility Reliability in the Front Seat

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Open grid

The pace of change in the electricity industry is picking up speed. It took 100 years to go from essentially no grid to the smart grid; it’s only going to take 20 years to go from the smart grid to the “open grid,” where control of the grid is going to be progressively more dispersed.

As I explained in detail in a recent Electric Light & Power article, “The ‘Open Grid’ and the Future of Distribution Network Reliability,” when the market developed over time into a centralized control scheme, control over the grid became very restrictive. Now, utilities are embracing the use of sophisticated distributed automated equipment to limit the impact of power outages. This, coupled with a flood of distributed energy resources coming into the market, is creating all kinds of havoc in terms of control. That’s where the open grid springs into existence.

The first thing to disappear is pricing control. Transactive energy is going to put control over power pricing into new areas. Let me explain. Power pricing was initially the sole domain of utilities. Deregulation brought retail providers into the mix. Now, with deep penetration and widespread proliferation of renewable generation, control over power pricing will be more tenuous. The calls are already starting for any producer of power to be allowed to sell power to anyone else via some type of transactive energy model (i.e. blockchain). That’s the essence of the open grid. Anyone can participate in any part of the transaction. 

You can’t stop this progression. No one should want to despite concerns over privacy, grid stability, fraud, and energy security. Despite a rough road filled with challenges, everyone will ultimately benefit from the open grid.

Utilities will still play a large role because they own and maintain the means for the transaction. If there are no lines, there is no way to transact. If someone wants to buy/supply power to someone 40 miles away, transactive energy systems will provide the financial means. But to move the product–usable, stable electric power–the utility’s lines are essential. In fact, there is no grid without them. In the open grid, it becomes even more important for utilities to support a reliable, resilient distribution system where distributed producers can reliably transact with distributed consumers.

If I’m selling electricity to a third-party consumer, there could be miles and miles of distribution lines in between my generation source and the electric power consumer. If there’s an outage along those lines, both sides of the transaction aren’t going to be happy, are they? What happens to the transaction? Does the utility(s) owning the line(s) owe me, as the seller, money, or does the consumer’s local utility step in and deliver power to my customer on my behalf from some other source? Do we simply cancel the transaction? Those issues and many more still need to be worked out.

In the open grid, as in today’s smart grid, you can’t stop all reliability issues from occurring, especially in what is basically a grid designed years ago for one-way power flow. To truly facilitate the open grid, utilities must provide a strong, resilient platform for the delivery of electric power. That platform should be designed as the one most advantageous to support the open grid.

I’d be interested in learning your thoughts on the open grid and how pricing and control of the grid soon could change how utilities operate.


Erik Svanholm

Publication Date

September 25, 2018