Grid Design

In this section, we review three power grid design concepts: super grids, smart grids, and microgrids. Each of these is a tool to reduce price volatility and achieve load balancing, necessary for integrating variable renewable energy. These tools can be complementary, but they also compete on the same market of price arbitrage ¹.

We recommend the construction of HVDC grids, as outlined below, though only in markets where it has been justified by other studies.

Supergrids

A super grid is a network of high voltage direct current (HVDC) interconnections between grids to transfer power from one to another, reducing price volatility ¹.

HVDC interconnections in the United States, including substations, cost an estimated $400 to $2700 per megawatt of capacity over a kilometer ². A fully-interconnected HVDC network in the United States, as estimated to be able to support 80% wind and solar electricity, would require 34,000 kilometers of cable with a capacity of 12 GW ³. Studies in Ukraine-Romania-Moldova ⁴ and in Austria ⁵ have also found that HVDC interconnections can save costs and foster renewable energy penetration relative to AC interconnections. Overbuilding and curtailing of variables sources and electricity storage are other ways to achieve this goal, but HVDC grids are likely to be cheaper.

At distances over about 500 kilometers, direct current (DC) is less expensive than alternating current (AC).

Source: Behravesh and Abbaspour ⁶.

For undersea cables, HVDC is superior to AC at distances exceeding 50-100 kilometers and valuable for integrating deep offshore wind and ocean energy sources ⁷.

At distances exceeding about 250 kilometers, DC transmission has lower electricity losses than AC transmission.

Source: EIA ⁸.

DC also requires less right of way than AC.

Source: Mooney and Johnson ⁹.

Development of superconducting materials could further reduce costs and line losses ⁷. Additionally, interconnected regions need to harmonize their electricity markets to allow exchange ¹⁰.

Concerns have been raised about the health effects of living near power lines, whether AC or DC. To date there is no evidence to substantiate these concerns ⁸. Regulatory hurdles are the main barrier to expanding HVDC interconnections, and in particular the need to provide compensation to areas that HVDC travel through but do not directly serve ⁸.

Smart Grids

A smart grid uses information technology to provide real-time price signals to producers and consumers. Especially when coupled with energy storage, a smart grid integrates distributed energy sources. Price signals are a tool to implement demand-side management, reducing price volatility ¹. Smart grids can enable modest savings in electricity consumption and greenhouse gas emissions from electricity.

Potential savings enabled by a smart grid in electricity consumption and greenhouse gas emissions. Source: Friedman and Sreedharan ¹¹.

Microgrids

A microgrid is a largely self-contained grid on the scale of 1 MW of capacity. A microgrid is powered by distributed technologies such as wind, solar, and combined heat and power, and it is regulated through local storage and demand side management. A microgrid can function independently or connect with a larger grid. Microgrids can add resiliency and ancillary services to the larger grid, facilitate integration of distributed renewable energy sources such as rooftop solar, reduce line losses, and accelerate deployment of smart grid technology ¹². Progress is needed in interoperability with larger grids, storage technology, standardized inverters and controllers, analytic tools, reliability, and communications strategies ¹².

Ancillary Services

Ancillary services are those services, other that provision of power, that are needed to keep an electric grid stable. They are of growing importance with increased amounts of renewable enegy on the grid. Some major ancillary services are as follows.

Major ancillary services and their typically time spans. Source: ¹³.

The financial value of ancillary services typically comprise only 2-3% of the wholesale value of electricity, but they are of outsized importance ¹⁴. Markets in ancillary services can be developed by making supply ¹⁵ or demand ¹⁴ more flexible. To date, relatively few ancillary services markets exist, leaving these services not properly priced.