Can Increasing Distributed Generation on the Grid Reduce Transmission Needs? It’s Complicated

March 4, 2024

Some might assume that increasing distributed generation on the grid in order to meet clean energy goals can reduce transmission needs. But the need for transmission investments is linked to the way in which distributed generation and batteries are adopted.

That’s the message from a new study, “Modeling the Effects of Distributed Generation on Transmission Infrastructure Investment: A Western Case Study” from the nonprofit organization Energy Systems Integration Group (ESIG), which addresses technical challenges to the clean energy transition.

How will clean energy goals affect high-voltage transmission in the West?

The study aimed to understand how adopting clean energy goals will affect high-voltage transmission in the Western Interconnection, which is one of the three main interconnections or “grids” in the U.S.

“The model’s objective was to find the least-cost generation and transmission expansion plan accounting for both capital costs and production costs for the 10-year study horizon,” said the study.

ESIG looked at the difference in high-voltage bulk transmission needs when clean energy goals are met with higher levels of utility-scale resources versus distributed generation.


Distributed PV and storage can alter congestion patterns

Distributed solar photovoltaic (PV) generation, often paired with storage, can change the movement and congestion patterns across large-scale transmission systems, the study found.

The report’s authors concluded that transmission planners must make trade-offs between flexible generation, storage and transmission to meet future system needs.

“We found that at low to moderate penetrations, distributed solar and storage can reduce the need for some transmission investments,” said Debbie Lew, associate director at ESIG. “As you keep going and increase it to higher levels of distributed generation, it requires more transmission.”

Distribution-level upgrades not studied

Lew stressed that the study focused on bulk power systems at the transmission level, as opposed to distribution-level upgrades. At the distribution level, the need for new poles and wires can sometimes be replaced by microgrids serving as non-wires alternatives.

For example, in December 2023 Eversource completed a non-wires alternatives project with a battery-powered microgrid that meets the needs of 10,000 residents in Provincetown, Massachusetts, and three other outer Cape Cod towns. The utility plans to use similar solutions in Connecticut and other parts of Massachusetts.

But distribution-level transmission wasn’t studied because it would be difficult to model it across the West. “We did not optimize levels of distributed generation because we don’t have good distribution system costs/benefits,” said a summary of the study.

The need for wind energy at night to balance solar

 The study found that without the presence of wind energy – generally available at night while solar is available during the day – to balance solar, the solar resources would need to be oversized to provide enough resources to store in batteries. This increases transmission needs.

“You need something to fill in the non-daylight hours for solar, like wind, storage or natural gas. Storage is not a generator so you need to account for losses and you need to overbuild the generation to store in the batteries,” explained Lew.

The study ran a capacity expansion model aimed at building generation, storage and transmission from 2030 through 2040. The model could select from 80 potential new or updated transmission lines. ESIG then ran an economic dispatch model that simulated hourly operations to quantify emissions, production costs and transmission flows for 2035.

Three scenarios involving various levels of distributed generation

ESIG’s report examined three scenarios that looked at a planning horizon of 2030-2040 for the Western Interconnection. The authors divided the western U.S. into 34 zones and studied transmission between each zone, Lew said.

The scenarios were:

  • A centralized scenario that holds distributed generation at existing projections and meets long-term needs through many types of utility-scale generation.
  • A hybrid scenario that assumes distributed generation deployment will increase at double the current projections and meet long-term needs through many different kinds of utility-scale generation.
  • A distributed scenario simulation that features distributed generation resources as the main method of meeting long-term planning objectives.

The centralized scenario included distributed generation adoption rates of 100% of the 2022 National Renewable Energy Laboratory’s (NREL) Standard Scenarios future projections. The hybrid scenario assumed distribution generation adoption rates of 200% of NREL’s future projections.

The third option, the distributed scenario, was a theoretical case in which distributed generation resources were simulated as the primary method of meeting long-term planning objectives.

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The hybrid scenario required about 30% less transmission in terms of both GW and GW-miles, said the study. In addition, the hybrid scenario required about 30% more storage capacity than the centralized scenario.

“These comparisons between the centralized and hybrid scenarios support the finding that distributed generation above present-day trajectories could cause certain interzonal transmission to be delayed or avoided,” said the study. However, ESIG also found that interzonal  transmission expansion was needed under all scenarios. In addition, adding large amounts of distributed generation could spark the need for high GW-miles of interzonal transmission investments.

The need to optimize power planning outcomes

The study results point to the advantages of simultaneously planning for transmission, distributed generation resources and utility-scale resources in order to optimize power planning outcomes. “But the trade-offs illustrated in the study indicate that there is no single solution in the pursuit of achieving long-term system needs and clean energy policy goals,” said the report.

Or, as Lew put it, “We will need all of the above to meet clean energy goals.”


About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

Twitter: @LisaECohn

Linkedin: LisaEllenCohn

Facebook: Energy Efficiency Markets

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