Navigating grid stability challenges with non-wires alternatives

The rapid increase in renewable energy generation and electrification has outpaced traditional investments in the grid (distribution and transmission). In 2023 alone, global renewable capacity additions reached a record 507 gigawatts (GW), a nearly 50% increase from the previous year. This growth is largely driven by solar PV and wind energy, which are expected to account for 95% of global renewable expansion by 2028. However, investments in grid infrastructure have not kept pace. It is estimated that annual grid investments need to grow from $235 billion in 2020 to $636 billion by 2050 to support this renewable expansion.

Understanding grid congestion challenges

Managing grid constraints is becoming increasingly challenging due to the rise in distributed energy resources (DERs) and the slow pace of traditional grid infrastructure expansion. Non-wire alternatives (NWAs) present an innovative solution to these challenges by utilizing DERs, energy efficiency measures, and demand response programs to defer or replace the need for traditional grid investments.  

These solutions are often driven by digital energy applications such as virtual power plants (VPPs). According to the Department of Energy (DOE), deploying 80-160 GW of VPPs by 2030 could save on the order of $10B in annual grid costs and will direct grid spending back to electricity consumers. At this scale, VPPs could contribute approximately 10-20% of peak demand, with local variation based on conditions such as DER availability and mix of utility-scale renewable generation.

Grid congestion arises due to transmission and distribution constraints, which include capacity, thermal, voltage, and stability limits designed to ensure reliable electricity delivery. When these limits are exceeded, inefficiencies occur. Grid operators need a solution to avoid hitting equipment limits while maintaining power quality.

The rapid growth in renewable energy generation and the increasing electrification of various sectors have significantly strained the existing grid infrastructure and its ability to deliver reliable electric power. Traditional energy grid investments in transmission systems and distribution have not kept pace with the expansion of renewable energy sources such as solar and wind. This disparity has led to grid congestion and stability challenges that threaten the reliability and efficiency of electricity delivery.

Additionally, the increasing penetration of distributed energy resources, such as residential solar panels and EV chargers, introduces further stress and imbalance on the grid. These distributed sources can cause fluctuations and intermittencies that complicate grid management. As an example with the growth of electric vehicles, there is a concern that  simultaneous fast charging operations can cause transformers to pop due to excessive current draw.

Need for non-wires alternatives

The traditional approach of expanding grid infrastructure through new wires and poles is not only costly but also time-consuming and often faces regulatory and environmental hurdles. This is where non-wires alternatives (NWAs) come into play.

NWAs focus on leveraging a mix of technologies and strategies to meet grid needs cost-effectively. These solutions can include:

• Demand response. Programs that incentivize customers to reduce or shift their electricity use during peak times, thereby alleviating stress on the grid.
• Energy storage. Battery systems that store excess energy during low-demand periods and release it during high-demand periods to balance supply and demand.
• Distributed generation. Localized renewable energy sources, such as rooftop solar panels, that generate electricity closer to where it is consumed, reducing transmission losses and congestion.
• Energy efficiency. Measures that reduce overall energy consumption, thus lowering the demand on the grid.
• Microgrids. Small-scale, localized grids that can operate independently or in conjunction with the main grid, providing additional reliability and flexibility. Microgrids can also act like distributed generation that could take load off the grid by putting generation and consumption to the grid edge.

Benefits of non-wires alternatives

One of the benefits of NWAs is that they enable grid operators to avoid hitting equipment limits while maintaining power quality. By addressing grid constraints with NWAs, utilities can defer costly infrastructure upgrades, improve grid reliability, and integrate more renewable energy sources. This approach not only enhances the grid’s resilience but also offers significant economic and environmental benefits by reducing the need for extensive physical infrastructure and lowering greenhouse gas emissions.

1. Cost savings. NWAs are often more cost-effective than traditional grid infrastructure upgrades. By reducing the need for new transmission lines and substations, utilities can save on capital expenditures and operational costs. Additionally, NWAs can provide net cost savings by utilizing existing assets more efficiently and avoiding the high costs associated with large-scale infrastructure projects.
2. Environmental benefits. NWAs support the integration of renewable energy sources, which helps reduce greenhouse gas emissions and other pollutants. By promoting energy efficiency and utilizing clean energy technologies, NWAs contribute to a more sustainable energy system and help meet regulatory requirements and customer demands for emissions reductions.
3. Improved reliability and resilience. NWAs enhance grid reliability by addressing local grid constraints and providing additional flexibility to respond to changing energy demands. By incorporating diverse energy resources such as distributed generation and energy storage, NWAs can help prevent outages and ensure a stable energy supply even during peak demand periods or unexpected disruptions.
4. Scalability and flexibility. NWAs offer scalable solutions that can be tailored to specific grid needs and regional requirements. This flexibility allows utilities to implement targeted solutions that address immediate concerns while also providing a foundation for future expansion and adaptation as energy needs evolve.
5. Faster deployment. Compared to traditional infrastructure projects, NWAs can be deployed more quickly and with fewer regulatory hurdles. In many cases, leveraging NWA mainly involves software deployments, such as an energy flexibility solution that manages DERs that are already deployed by customers. This allows utilities to respond rapidly to emerging grid challenges and take advantage of new technologies and market opportunities as they arise.
6. Enhanced grid modernization. NWAs support the transition to a modern, smart grid by integrating advanced technologies such as demand response, energy storage, and distributed generation. This modernization enables better grid management, improved data analytics, and more efficient energy use, ultimately leading to a more resilient and adaptive energy system.

Conclusion

The growing challenges of grid congestion and stability necessitate the adoption of NWAs and energy flexibility programs. These solutions offer a viable pathway to enhance grid reliability, reduce costs, and integrate more renewable energy sources, ultimately supporting a more resilient and sustainable energy future.

By leveraging a mix of demand response, energy storage, distributed generation, and energy efficiency measures, NWAs provide the flexibility and scalability needed to address the dynamic nature of modern energy demands and renewable integration.