Astrid's Updates

The Rising Need for Grid Edge Technologies in the Midwest

Authored by:
Astrid Atkinson
Last Updated: 
May 21, 2024

It’s no secret that preparing the electric grid to handle sustained demand growth, worsening impacts from climate change, and a large-scale shift to renewable generation is a complicated and expensive task. For utilities in the Midwest, investments in carbon-free generation, energy storage, and especially high-voltage transmission infrastructure are quickly raising the price tag for end consumers. At the same time, utilities that delay adaptation to load growth could miss out on the economic development those new loads bring. 

The Midwest’s regional grid operator—the Midcontinent Independent System Operator (MISO)—recently published its long-term transmission build-out plan, a blueprint for how the bulk power system can reliably serve 145 gigawatts (GW) of net peak demand expected by 2042—an almost 15% increase from record-high demand seen in 2011. 

The price tag? $23 billion.

The untapped potential of local resources

While transmission capacity additions are unequivocally necessary, neither Midwest utilities nor the consumers they serve can afford to rely exclusively upon them. Notwithstanding the staggering price tag, national trends suggest that transmission build outs move too slowly, incurring avoidable costs, greater emissions, and threats to reliability.

Fortunately, the same change that necessitates transmission capacity additions—demand growth—offers utilities a solution. The largest drivers of electric demand growth through 2030 include transportation electrification, building electrification, data center growth, and on-shoring of manufacturing. The latent flexibility of these new loads – especially electric vehicle chargers and manufacturing facilities with on-site generation – can be used to reduce the need for transmission build-outs by shifting electricity usage to periods with available generation and local grid capacity.

Put simply, utilities have the opportunity to leverage, rather than simply serve, new loads.

Building on decades of Midwest innovation

Load management programs—inclusive of demand response (DR)—and their component “demand-side solutions” are by no means new to Midwest utilities. As far back as the 1980s, utilities like Duke reduced peaking by up to 24% through such programmatic initiatives.

Historically, utilities faced a lack of visibility into the responsiveness of the capacity enrolled in load management programs. For decades, utilities could transmit signals to consumer devices and facilities – but wouldn’t receive any data back. The lack of a feedback loop meant the utility could estimate the total impact of load management actions, but had no ability to differentiate which devices were responding from those that were not. As a result, the utility was left unaware of how demand management actions were impacting local utility equipment.

That’s no longer the case. Today, grid orchestration software provides the opportunity for utilities to exchange data directly with devices and aggregators of demand-side flexibility – offering high-fidelity visibility into the responsiveness of load management programs. With this new real-time visibility into the flexibility that consumer-sited resources can provide, utilities have the opportunity to put demand response to work - not just a few times a year to help with particularly hot days, but every day. 

The $13 billion opportunity

As more and more flexible loads connect to the grid across the Midwest, utilities can relieve strain on the grid and reduce the need for future infrastructure build outs. The savings opportunity is enormous: US utilities stand ready to save up to $13 billion per year through orchestration of load flexibility, according to the Department of Energy, which just released a comprehensive report on the advantage of innovative grid technologies.

Changing the way we manage local grids creates new challenges for the thousands of local utilities that serve American communities today - and provides new opportunities to meet local needs. Innovative utilities like Connexus Energy, the Midwest’s largest electric cooperative, are pioneering this community-oriented approach through joint initiatives such as the National Renewable Energy Laboratory’s (NREL) Project Solar-HERO – a DOE-funded initiative that seeks to provide utility operators with tools to leverage local energy resources for enhanced flexibility, resilience, and cost savings. Discussing the utility’s rationale for participating in the project, Nick Loehlein, Vice President of Electric Operations at Connexus Energy, explained that “investing in the distribution system is the quickest, most efficient way to future-proof our operations for the clean energy transition.”

Connexus is far from alone. The National Rural Electric Cooperative Association (NRECA) recently selected three Midwestern utilities, two in Indiana and one in Kentucky, for its Community-Integrated Distributed Energy Resilience (CIDER) project. Funded by the Department of Energy, this program is designed to demonstrate how grid edge technologies can complement existing utility investments to lower costs and leverage local flexibility to operate a more reliable grid.

The time to act is now

Make no mistake, grid edge technology can’t take the place of all transmission upgrades. But with red tape delaying transmission build outs and flexible energy resource adoption accelerating, keeping up with load growth isn’t just expensive. Unless we can leverage new tools like visibility and control at the grid edge, we won’t be able to meet the economy’s growing need for electricity - at any price.

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