What’s Missing for the Energy Transition?
 
Keeping The Lights On in a New World
In 2008, the United States (US) Department of Energy’s (DOE’s) Electricity Advisory Committee (EAC) produced a report (published January 2009) called “Keeping the Lights on in a New World.” I chaired the transmission section. The EAC’s intent was to enable the DOE (Office of Electricity) for President Obama’s Administration.
Click for report >> Keeping Lights On in a New World – Jan 2009 (energy.gov)
Back then, transmission and markets were the solutions to our electricity future among other items. Today, our electricity future has blurred, and I fear we are missing some long lead time needs that need action starting today.
Electricity is vital to our nation’s economy, and we must take a step back and look at “What’s Missing?” Pardon my blunt approach (born in Jersey) and lame humor. The energy transition requires a broader view. What is missing is greater growth in demand as energy sectors evolve to electricity, new entries of carbon-free and carbon-neutral resources, and life cycle considerations. Energy Transition More Than Renewables
The energy transition requires a broader view. What is missing is greater growth in demand as energy sectors evolve to electricity, new entries of carbon free and carbon neutral resources, and life cycle considerations. Furthermore, the grid edge will be much more interactive. Of course, distribution requires transformation from dumb to smarter, and shall we enter AI (artificial intelligence)? Conferences about the energy transition are mired with the same old same old. Renewables are worthy certainly. Cybersecurity is worthy certainly. Resilience is worthy certainly. Federal-state coordination, and more – the beat goes on.
But we are missing some critical factors that are long lead time needs. These are below and I certainly welcome other factors missing. If this appears political, that is not my intent. I am an engineer (registered Professional Engineer, State of Ohio) and a grid planner that happens to know the grid like the back of my hand. That is a grand boast of course, but I am concerned for our future generations, and I wanted to engage you on my list of “What’s Missing?” Electricity Demand Growth Understated
The power sector is doing a great job with carbon reduction over all other energy sectors. We can all see the transportation sector migrating to electricity, but others, buildings, and industry, will as well. Yet demand projections show modest increases with standard extrapolations. Are we missing something?
Demand is likely to double – name the horizon, but it is not 100 years from now. It may be as soon as a few decades. Are we ready? I am told the Columbus Ohio area will double in demand in the next decade from last decade due to the world’s largest semiconductor plant being built and its ancillary impacts plus an abundance of AI-driven data centers growing like tulips in spring.
The Energy Information Administration (EIA.gov) produced for years the “Annual Energy Outlook” (AEO) with a horizon of 2050. Every year the AEO is updated, but not in 2024. The current 2023 version (2022 version more comprehensive) shows modest electricity demand and seems to miss the inflection point coming as the electricity sector grows with conversions from other sectors. I am not expert at predictions, but there seems to be something missing. Admittedly, my Columbus Ohio experience may be at play in my views.
Certainly, demand has benefited from energy efficiencies (e.g., lighting, heating, and cooling). Behind the meter solar panel installations have also helped the net energy for load picture as distributed energy resources (DERs) increase. But other drivers such as population increases, high demand data centers, and transfer of energy conversions to electricity will create an inflection point in the demand curve that is extraordinary but not recognized well in my humble opinion. Demand is likely to double – name the horizon, but it is not 100 years from now. It may be as soon as a few decades. Are we ready? Are We Missing Carbon Free/Neutral Supply?
We can also see central station electricity supply retirements with wind and solar picking up the slack in the AEO. Where are the other carbon free and carbon neutral resources? Small modular nuclear reactors (SMRs) are advancing, and green hydrogen is also advancing. Where are they in projections? Can hydro be better optimized and grow further as well? We need to advance SMRs and the hydrogen economy now to keep up with fossil-fuel retirements and increased demand unrecognized.
We also need to enhance DERs on rooftops with backyard pad mounted batteries. We really should not waste land or floating solar panels when rooftops are readily available. These backyard batteries can be similar to electric vehicle (EV) sizes and may add to the life cycle of those batteries with an EV (intensive) to back yard (less intensive) transition to increase life? The law of large numbers aggregated (with need to access inverter-based resources (IBRs) from solar panels and batteries, etc.) can assist electricity supply, improve the economics of roof mounted solar panels, and get grid utilization (load factor) from the doldrums of 50% to nearing 70%. Imagine that, and it has to be imagined at this point awaiting marketable entries. Transmission Impediments Continue
While at American Electric Power (AEP) in a transmission leadership role for several years, some of my friends called me the “Godfather” of transmission (pardon another boast). I wrote the Eisenhower interstate strategic parallel in 2005 (Federal Highway Act of 1956 with investment, siting, and cost allocation parallels) leveraging the Energy Policy Act of 2005 (EPAct2005) developed during President George W. Bush’s Administration. People know I love to look at transmission towers when I travel. I know this space and loved every minute of my career at AEP and in transmission. However, we have the same issues we had in 2008. But we have seen increased transmission investment annually too. This investment is worthy for the nation’s electricity needs.
Siting (who enjoys those beautiful lines?) and cost allocation (who pays among the 3000 +/- distribution entities and their customers in the US?) have been the largest impediments for transmission for years. EPAct2005 tried to solve siting with backstop siting for national interest electric transmission corridors (NIETCs), but the NIETCs have been hamstrung by court action. The US DOE is looking at making sure at least federally controlled lands assure siting is “streamlined,” but states and some localities are more involved on this matter with scores of ways to do things. Transmission is seen as good investment (over distribution) and has the correct incentives per FERC (Federal Energy Regulatory Commission) Order 679 (post EPAct2005). We do not need to provide taxpayer funds for transmission, except publicly funded agencies. Investor-owned utilities are properly incented in my view. One looks at the risks of approvals and siting to justify the returns, but once installed, transmission is like an annuity with double-digit returns.
Certainly, we can add HVDC (high voltage direct current) more readily in the US along with grid enhancing technologies (GETs) such as dynamic line ratings (DLRs). There is a lot in our grid toolbox today and they are not missing! We need to advance SMRs and the hydrogen economy now to keep up with fossil-fuel retirements and increased demand unrecognized. Grid Planning Fragmented
Certainly, FERC Order 890 established regional planning authorities and they are doing well. However, a broader view is needed. The seams are at issue with not only distance (siting) issues, but also with cost allocation issues. Since we are moving to more decentralized supply, it is important that market reach is extended for aggregation across large footprints. That takes transmission.
  Grid Underutilized
Another factor missing in the equation is the grid is declining past 50% load factor (i.e., measure of grid utilization) which is markedly inefficient. With demand growing and storage growing slowly, we can approach the grid with leveling demand further. This is not hard to figure out, and the greatest investment is to use what we have to make the grid more efficient. Storage will help for intermittent renewable energy, but we need to control demand even imperceptibly with devices (and EV chargers) to control peaks. Time of use (TOU) rates are a way, but the telecommunications industry moved away as the rates are archaic in approach. Customers do not want to think about timing their use, but they do want affordability.
We must also incent new generation resources to places that have retired central power stations. The transmission is already there, so let us use it! Grid Resilence and Grid Security
There is a lot of discussion and articles for grid resilience and grid security. Daily there are discussions on how the grid should be enhanced for climate change, weather, etc. In addition, cybersecurity is also a hot topic (and I know this topic evolves and is worthy of the hot topic in perpetuity, with now AI?). Not sure about what is missing on these topics but wanted to at least list it. Resilience for distribution? Coming later. Supply Chain and Labor
The issues of supply chain are enormous on most fronts. The lithium-ion battery for example, which is much more cost effective than in the past, is sourced from outside the US. Lead-acid batteries, less effective than lithium-ion today, are sourced in the US. I raised the issue of how we can improve lead-acid batteries and jokingly suggested we produce a better name. But seriously, we have many supply-chain issues, another big one is nuclear fuel.
STEM (science, technology, engineering, and mathematics) labor is waning as well as labor for construction, operations, maintenance and in fact all areas. The energy transition should attract people as the electricity sector is in an exciting time with innovation wanting.  
Distribution Remains an Obligation Over Investment
On another front, US distribution investment returns remain (conservatively) about 150 basis points below transmission investment returns (+/- varying in every state and jurisdiction). Surely, we need a more robust transmission grid, but distribution investment appears limited to obligation to serve and just in time (maybe a bit later). The US DOE has a goal to advance EVs, with some states considering higher goals. Are we missing something?
The distribution grid is not ready. Fast chargers require high demand. If the goal is chargers everywhere, how will rural distribution manage the step function in demand? We have well over five million miles of distribution in the US awaiting transformation. Indeed, urban underground networks may be dated as far back as the early 1900s awaiting transformation. Some investment is being made, but not enough.
An aside – batteries may evolve with the hydrogen economy to better fuel cells, for example, lessening the need for more distribution investment. Certainly, this will be better for larger vehicles (e.g., trucks and trains), but imagine another source coming. It will in my view as EVs and internal combustion vehicles have a destiny to a better power source for your great granddaughter’s new muscle car!
Beyond EVs, there are many other sectors looking at electricity for their net-zero future. Data centers are demand hogs and growing as well. We really need to focus on distribution at the federal level as lead, with state coordination of course. NARUC (National Association of Regulatory Utility Commissioners) is doing well sharing best practices, but distribution is not your grandfather’s grid any longer nor can we invest with single digit returns. How can we incent? Should the taxpayer (federal and state grants) assist the rate payer for distribution investment?
In addition, distribution is dumb between substation and meter, yet we are asking a lot. Visibility will not be hard or costly to achieve (phasor measurement units (PMUs) at feeder breakers?), but we need to transform distribution with the same investment drive as transmission.
And another thing. I travel all over the world and I see distribution with steel and concrete poles whereas in most of the US I see pretzels (wood poles). Hurricane prone areas like Florida are advancing to steel, but not much in the US. Even transmission is troubled with wood in some places. In addition, pole attachments are weighing down poles with increasing underbuilds for telecommunications, and some poles have attached solar panels challenging structural integrity. Can we advance distribution resiliency? Average Home Electricity Service a Barrier
Think about the average service at homes in the US. A service at 50 amps is a norm for homes that predate the 1970s. It would cost thousands of dollars to enable EV charging at home (do not get me started on the archaic time of use (TOU) approach of submeters for charging at homes), but then if everyone is enabled, the distribution grid would have to be in lock step. This is not a trivial barrier given housing is less affordable today. Life Cycle Concerns Overlooked
What about life cycles of batteries and solar panels? It appears in Europe and other parts of the world, they are positively addressing this issue (recycling/extending), but what are we doing proactively in the US? We really need to figure out what to do with what we are doing when end of life occurs. Then we add nuclear waste, which awaits a solution (hello, Congress?). Affordability
The EIA,gov AEO shows the average electric bill declining in current dollars slightly through 2050. The transmission and distribution (T&D) portion of the bill is rising, meaning energy cost is flat or declining in current dollars. Really? I do see T&D investment needs fueling that part of the bill, but energy prices will not go down in today’s dollars. Electricity demand and resources are understated and will drive the energy side up as well. This is a major concern unaddressed.
Should regulated accounting policies be reviewed? Asset lives are much longer with resiliency added and depreciation can be lowered for reduced rates, for example. Affordability is important to review these policies. Problems Revealed are Problems Solved
Admittedly the view here is a bit harsh and some of it tongue-in-cheek to get people to step back and look at “What’s Missing?” And my list is not exhaustive. Surely there are many gap filling ideas already on the drawing board. Engineers out there are true problem solvers for society by their very nature. It is time to discuss all aspects of the energy transition so that our grandchildren are assured they have a better future.
The only way to solve problems is to make them visible. The greatest problems listed above beyond the usual you hear are added carbon free/neutral supply options, being realistic with demand, transforming distribution, addressing grid utilization, and engaging the young.
It was President Kennedy on May 25, 1961, who said we will put a man on the moon and bring him home safely before the decade was out. We did not know how to do that. Yes, he led funding the space program, but look at what happened on July 20, 1969? It was the space program that enticed me to be an engineer. The energy transition can entice as well. I think it will. Ask an engineer. Better yet, engage a student on the excitement ahead. The grid is declining past 50% load factor (i.e., measure of grid utilization) which is markedly inefficient… The greatest investment is to use what we have to make the grid more efficient. Michael Heyeck, PE has over 40 years of experience in the electric power industry. He retired in 2013 as Senior Vice President – Transmission for American Electric Power serving 37 years at AEP, and founded The Grid Group, LLC. He serves on several industry and nonprofit boards. Heyeck serves as CIGRE VP Finance (Treasurer) internationally and formerly president, CIGRE US National Committee. Heyeck served four US Presidential Administrations on the US DOE Electricity Advisory Committee (Chair, 2017-2020). He holds BS and MS degrees in Electrical Engineering and holds an MBA. Heyeck is a registered Professional Engineer in the State of Ohio with over 30 years as an elected official on Westerville (Ohio) City Council.  
This article was originally published in the June 2024 issue of the Transformers Technology magazine, which you can access here .
To download the PDF version of this article, click here .