Article | Transforming Grid Investment Planning

Article

Transforming Grid Investment Planning

BY Sitha Ngan , Greg Player and Mike Rutkowski
Utilities face a historic challenge in maintaining an affordable and reliable grid while enabling electrification, distributed energy and renewables. The unprecedented level of investment needed is changing how utilities plan their capital spend and obtain favorable regulatory outcomes.

Siloed investment programs, each targeting a separate problem such as asset age, are no longer sufficient. Utility leaders must present a robust business case that examines potential solutions for electric grid challenges, outlines monetization of listed benefits and explains how to minimize cost to customers.

To achieve regulatory approval and realize potential benefits, utilities must provide a compelling case to stakeholders as to why modernizing the electric grid is needed. Over the past decade — driven by underestimated costs, unmet schedules and overestimated returns — regulators have increased scrutiny of grid investments. Simultaneously, they’re pressured to keep rates low to prevent major impacts to consumers’ wallets already under strain from rising economic costs.

To develop grid investment plans that will satisfy all, utilities must transition from siloed business cases and programs to a whole-system approach.

"We all face similar challenges to maintain and improve reliability and affordability for our customers. 1898 & Co.’s AssetLens cuts through the noise and produces actionable projects in an organized fashion that is easy to communicate to regulators and stakeholders. As the parameters around our investments change, its flexibility helps us quickly compare the benefits of proposed projects across multiple categories. Within months, we were able to stand up AssetLens and quickly see the benefits our investments would bring. That is why AssetLens is the primary tool used at Evergy to optimize investment in our grid."

Ryan Mulvany, Vice President, Distribution, Evergy

Conducting Whole-System, Data-Driven Analysis

To address the uncertainty and volatility that can come with grid investments, 1898 & Co. takes a comprehensive approach to transforming capital planning processes and developing customer-centric, data-driven investment plans that account for a range of possible scenarios. By providing a flexible framework within the planning process, utilities can prepare to meet short- and long-term goals and anticipate future regulatory expectations.

Utilities understand the need to increasingly incorporate forward-looking analyses into decision-making. With whole-system, data-driven analysis, utilities can scope grid investments to meet myriad future needs. This creates a more connected, realistic system model that can identify key trends that stem from supply chain disruptions, workforce availability, regulatory impacts and more. These models can also simulate consequences of asset failure and extreme weather, as well as predict additional impacts of electrification. Such modeling enables utilities to plan for a variety of factors.

Maintaining a Customer-Centric Focus

It’s vital to relate the impacts of grid investments to customers, and to convey an understanding of how the customers might be affected. Using an approach that allows modeling constraints that consider customer affordability and other limits, 1898 & Co. creates a thorough plan that is suitable for multiple stakeholders. Communicating the benefits and reasoning behind why rates might be increasing to accommodate investment decisions can help mitigate concerns.

A holistic, robust plan that can be easily communicated to all stakeholders — including consumers, regulators, shareholders and employees — limits confusion and provides the opportunity to address concerns early. The use of geospatial visualization further illustrates investment impacts and costs, as well as community impact and project coordination.

Incorporating Dynamic Optimization

Maximizing investment benefits while minimizing costs is key during capital planning. 1898 & Co. integrates engineering, procurement and construction experience into the overall approach. This combination incorporates real-world constraints and known data to optimize investments to produce a capital plan that is executable and operational.

Bringing this experience into every project provides the guidance needed to keep forecasts accurate and maintain awareness of all possible variables. Utilities can have greater confidence knowing plans are built on actionable data and guided by industry experience.

As electrification, distributed energy and renewables continue to grow in prominence, taking a holistic approach to grid modernization planning will help utilities overcome current and new challenges. Looking to the future, data-driven investment planning will continue to inform the strategic decisions of today that will form the foundation for a forward-thinking tomorrow.