Grid modernisation could make all the difference in restoring storm-impacted cities to a functional state, thus, providing safety and connectivity for those in need
Despite days of preparation, the unprecedented strength of Hurricane Harvey and Irma left millions of customers without power and caused tremendous physical damage along its path. It is evident that very little could have prevented the structural devastation caused by a storm category of four and five. However, the millions spent in grid modernisation initiatives in places such as Texas and Florida may have reduced power restoration time and storm response preparedness, compared to places with limited upgrades such as Puerto Rico.
CenterPoint Energy, the largest utility in the region of Houston, has been on the forefront of grid modernisation initiatives for improving power restoration time, installing 858 Intelligent Grid Switching Devices, automating 31 substations, and updating its electric meter system to advanced digital meters.
Similarly, Florida Power and Light in response to previous hurricanes, has invested hardening its distribution command center. Regardless, the degree of damage and preparedness these recent hurricanes of historic nature have exhibited, they shine light on an important reminder of ensuring grid resiliency as a safeguard against severe weather conditions.
According to the U.S Department of Energy’s Office of Electricity Delivery and Energy Reliability, storm weather is by far the number one cause of power interruptions, costing anywhere between $18 billion and $33 billion a year. Hurricane Sandy exceeded this amount and affected more than 20 states, and delivered an economic loss of $50 billion. This problem is further aggravated by an aging infrastructure. The industry estimates that over 67 per cent of transmission and distribution assets are either nearing end or are past their useful life.
To address these issues utilities are closely evaluating and prioritising areas that are in most need of upgrades and reviewing advanced technologies. The previous storms were instrumental in jump-starting the discussion and implementation of micro grids in island mode. These states are targeting mission critical sites (such as water treatment plants, emergency shelters, hospitals, police and fire) and have since demonstrated clear success not only in terms of preparedness against severe weather conditions but also in terms of electricity savings and improved efficiencies. Frost & Sullivan estimates that in 2016, micro grids generated approximately $2.26 billion in North America versus $4.52 billion globally, indicating an important region for micro grids.
Early adopters include the state of Connecticut that awarded a total of $18 million for nine micro grid pilot projects. Similarly, New York has provided $40 million for funding 83 community based micro grids and ComEd is investing $300 million in the development of six advanced micro grid projects in the state of Illinois.
Storm preparedness is not necessarily the sole driver for micro grids as there are growing use cases for arbitraging time of use rates, controlling peak power load demand, and demand response. However, grid resilience still remains an important one. Frost & Sullivan projects micro grids to grow at a compound annual growth rate of 16.1 per cent between 2015 and 2022 in North America – with commercial and community/utility grid scale generating the fastest growth among all segments.
While it is still too early to state the amount of monetary losses caused by the past two storms, it is fair to assume that without grid modernisation initiatives the damage may have been much worse in places such as Texas and Florida. Furthermore, grid modernisation could make all the difference in restoring impacted cities to a functional state, thus, providing safety and connectivity for those in need.
Now Frost & Sullivan’s Global Programme leader for Grid Power, Farah Saeed has close to 20 years of experience in the energy and environment sector. Saeed houses a deep understanding of business issues facing mature and emerging energy markets, particularly in transmission and distribution with an emphasis on smart grid including power distribution equipment, demand side management and smart grid convergence with the connected home.
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