Electric power is essential to the economic and social welfare of all Americans. That will be even more the case in the decades to come. In recognition of this fact, the congressional language that gave rise to this committee called for “an evaluation of the expected medium- and long-term evolution of the grid … [focused] on developments that include the emergence of new technologies, planning and operating techniques, grid architecture, and business models.” In whatever ways the power system evolves in the future, the system must be simultaneously safe and secure, clean and sustainable, affordable and equitable, and reliable and resilient.
No one can predict precisely what the electricity system will look like several decades from now. Because the system consists of so many long-lived facilities, it is reasonable to assume that superficially, much of it will look very much the same as it does today. Indeed, looking back over the past 30 years, many of the same power plants still operate and nearly all of the power lines are the same as the ones that have been in place for many decades. But looks can be deceiving. Much of the electricity we use today comes from different generating technologies than in the past, and the power system is now operated, owned, and managed in very different ways than three decades ago.
When the Committee on the Future of Electric Power in the U.S. examined prior attempts to project even simple things like total demand, it found that most estimates had missed the mark. For this reason, it did not try to predict what the system will look like several decades in the future. Instead, the committee identified a number of driving forces—social, technical, and economic—that are likely to alter the landscape of the U.S. power system. These include the following:
- Possible large growth in future demand for electricity.
- Efforts to decarbonize the U.S. economy and eliminate the emission of conventional pollutants, both by transitioning power generation to low- or zero-emission sources and by making much greater use of decarbonized electricity as a substitute for fossil fuels in transportation, buildings, and industry.
- Developments at the edge of the grid such as distributed generation, storage, microgrids, energy-management resources, and energy efficiency measures.
- Grid stability challenges arising as a result of high penetrations of nondispatchable sources of generation such as wind and solar.
- A desire to reduce social inequities.
- Concerns about the impacts of the energy transition on employment.
- A changing international environment including powerful market forces arising from globalization, shifts in the locus of electricity-relevant innovation, and growing concerns about state-sponsored competition and disruption.
Because the United States does not have a single national electric power system, those drivers of change will likely interact in complex and often unpredictable ways to produce varied outcomes at different times and in different regions of the country.
In preparing this report, the committee considered a large body of information, analysis, and research. It ran two workshops, one on computing, communications, and cyber technologies, and one on models used in power system planning. The committee also conducted webinars on power flow models, grid architecture, and power marketing. As specified in the study’s statement of task (Appendix A), the committee’s findings and recommendations include insights and advice on technologies, planning and operations, business models, and grid architectures.
After framing key issues in Chapter 1 and identifying drivers of change and some of their potential consequences in Chapter 2, the four subsequent chapters explore key issues in depth. The ways in which existing and new hardware, software, and communications are used in structuring and operating the power system is largely determined by the economic and regulatory environment in which the system is operated. That environment is discussed in Chapter 3, which examines the balance among a variety of important social objectives for the electric system. The chapter identifies a number of constraints that make it difficult to realize the full benefits of emerging capabilities, and it recommends ways in which those constraints could be alleviated.
Creating an environment that promotes innovation will be essential if the future power system is to do an adequate job of providing service that is safe and secure, clean and sustainable, affordable and equitable, and reliable and resilient. Until the final few decades of the 20th century, the locus of innovation in the electricity industry was in United States. The United States continues to be a leading innovator in, and supplier of, technologies and systems for communications and controls, in large part because of spillovers from the rapid growth of related markets. However, in recent decades, much innovation, and most suppliers of heavy electric equipment, have moved to other countries. Chapter 4 explores the tensions playing out between the forces of globalization and those resulting in increased international conflict. It argues that continuing innovation will be essential to ensuring a healthy future for the electricity industry, and that international collaboration will be an inescapable part of that process. Chapter 4 offers recommendations on how that can best be achieved.
After exploring, in Chapters 3 and 4, the large-scale regulatory, economic, and other issues that will shape the future of the system, Chapter 5 provides a detailed assessment of specific technologies and systems, including clean generation, storage, power electronics, systems to perform grid management, coordination and control, and a need for improved simulation tools and implications for the future workforce. Chapters 4 and 5 include the committee’s recommendations for continued and expanded investment in the development of these technologies so that the nation may realize their full capabilities in enabling a variety of future grid architectures.
As the nation has become ever more dependent on electric power, providing reliable and resilient electric service is increasingly important for Americans’ welfare and health. Chapter 6 explores the issues of ensuring both physical and cyber resilience. After reviewing the ongoing need to ensure physical resilience, the bulk of that chapter focuses on critical issues of ensuring and improving cybersecurity and resilience. The chapter discusses the committee’s findings and recommendations for how this can be achieved, by employing well-designed and operated systems that involve people and processes as well as technology, and develops a variety of recommendations for how to improve and reduce future vulnerabilities.
FIVE MAJOR NEEDS FOR THE FUTURE ELECTRIC POWER SYSTEM
As directed by the statement of task, the committee performed an assessment and provided findings and recommendations across several topics: technologies; planning and operations; business models; and grid architectures. The report covers these issues in depth, and has clustered the committee’s recommendations under five major areas of need, as outlined below and in Chapter 7. Table S.1 and Table 7.1 sort the committee’s many recommendations in terms of these five major actions, and provide the committee’s judgments about which entities should take actions to address the identified concern. We begin by presenting the need to improve our understanding of how the system is evolving. Most of the recommendations for major changes and improvements are addressed in the subsequent need areas.
1. Improve our understanding of how the system is evolving. Because of many parallel changes in technology, patterns of electricity consumption, and social expectations for electric power, it is more difficult to forecast future electricity supply, demand, and infrastructure today than it was a few decades ago. The tools for forecasting electric futures need to be capable of adaptation because the architecture of the grid will evolve in different ways in different regions, and will adjust as the country reduces emissions of greenhouse gases from the overall economy through decarbonizing the electric supply and more pervasive use of electricity. As part of this effort, the nation needs to build and test new tools for simulation and experimentation to understand how the grid of the future will behave and how operators and policy makers can ensure its continued reliability.
2. Ensure that electricity service remains clean and sustainable, and reliable and resilient. Reducing emissions of CO2 and other environmental impacts of electricity generation will remain a major challenge in the coming decades. While the focus of the role of electricity generation on ambient air quality may diminish as generation becomes less polluting, there is a growing focus on increasing sustainability and addressing climate change, in part through increased use of renewables. At high penetrations, this will require increasing the capacity of high-voltage, multistate transmission networks. The balance between reliability and resilience may shift over time, but excellent overall performance will remain essential. The power system is vulnerable to a variety of natural events and accidental as well as pernicious human physical and cyber attacks that can be minimized yet not eliminated entirely. New technologies, along with continued investment in critical elements of the electric power system, such as long-distance transmission and robust distributed resources, will improve the nation’s capabilities. The nation, the electric industry, and other stakeholders need to do a better job of educating and training people at all levels to design, reinforce, manage, and run a resilient and effective electric system.
3. Improve understanding of how people use electricity and sustain the “social compact” to keep electricity affordable and equitable in the face of profound technological changes. Already many changes in the grid reveal opportunities for new services and configurations of electric resources. Some kinds of profound changes in electric supply, such as some customers becoming less dependent on grid-delivered power, could be highly disruptive to the social compact that has been central to the electric power industry and its provision of universal service for more than a century. These changes could have large impacts on customers with low incomes. It is crucial to build tools to understand those needs along with devising regulatory responses to evolve and selectively strengthen social compacts in light of changing circumstances.
4. Facilitate innovations in technology, policy, and business models relevant to the power system. New technologies, such as clean generation, wide electrification, energy storage, power electronics, and systems for monitoring and control, can enable large changes in the way the power system is organized and operated. Especially large changes may occur in the distribution and retail parts of the grid where the system meets people and non-utility companies (the so-called grid edge). While supply provided by central generation and transmission and distribution wires will remain essential, technical, policy, and business-model changes could speed innovation and the introduction of new services to consumers at the grid edge. Understanding how electricity consumers behave, how devices and energy services can be aggregated for supply, and how such trends affect system loads are emerging as some of the most profound technological, regulatory, and planning challenges and opportunities facing the future of the grid. That understanding requires situational awareness and control across potentially tens of millions of nodes and at high rates of response (milliseconds, not seconds). Such changes will require more flexible system planning and operations at both the bulk-power and local levels.
5. Accelerate innovations in technology in the face of shifting global supply chains and the influx of disruptive technologies. Many of the basic power system technologies were first developed in the United States. However, the supply chains and manufacturing for most critical electric power system technologies have now moved offshore. The United States has been underinvesting in the innovation needed for future electric system performance. Massive new private and public investments are needed in innovation, especially for more cutting-edge technologies on which the future grid will depend. Policies are needed to move supply chains and manufacturing for those technologies back to the United States, while recognizing that innovation and manufacturing are now global. The United States must balance competing goals—one to gain from the advantages of a global search for innovative solutions and the other to ensure U.S. control and awareness of and access to critical grid infrastructure technologies. The advantages of engagement and awareness of progress overseas will be particularly important where grids are expanding in size and function, which facilitates testing, demonstration, and deployment of new technology.
TABLE S.1 Specific Committee Recommendations Sorted by Five Broad Needs
In each case, the right-hand column indicates the entity or entities to which the recommendation is directed. The order of appearance is in terms of the chapter in which each recommendation appears and does not imply level of importance. Table S.1 appears later in the report as Table 7.1, along with Table 7.2, which sorts recommendations based on who they are directed to.
|1. Improve our understanding of how the system is evolving.|
|Recommendation 4.1: In light of the increasing dispersion in the sources of innovation in the sector, the Department of Energy (DOE) should periodically issue a request for proposals from non-DOE affiliated entities to conduct an independent assessment that “takes the pulse” of the global and U.S. innovation systems that are relevant to the electric power sector. Such pulse-taking efforts should look widely at diverse sources of innovation both domestic and international. It should also assess the track record of various efforts to steer innovation, and varied policy and market incentives and barriers to adoption of innovations.||Directed to:
|Recommendation 4.5: Government support for key electricity research initiatives such as grid modernization and development of technology necessary for deep decarbonization should be sustained for sufficient periods of time to enable new areas of discovery. Congress should appropriate multiyear (minimum of 5-year) funding streams for proposed initiatives in key areas of national interest such as those identified, and the Department of Energy (DOE) should implement long-term funding for projects that demonstrate alignment with critical national needs, technical success, potential net economic benefits, and cost-shared funding where appropriate. Such programs should follow best practices that include ensuring that DOE program managers have the knowledge and authority to oversee projects effectively and efficiently and clear criteria to govern advancement of projects.||Directed to: Congress with DOE to Implement|
|Recommendation 5.5: The Department of Energy (DOE) should support a sustained collaboration of national laboratories, academia, utilities, and vendors to develop a family of intercompatible simulation tools that have common standard interfaces to work together to assess the performance of the present grids and better anticipate the implications of the various ways the grid architectures may evolve in the future. Because having a single, large, integrated model of very large, complex grids is impractical, the development and standardization of common interfaces between simulation tools will enable the studies of evolving architectures of generation, transmission, distribution, and information and communications technology (ICT).||Directed to:
DOE to Work with National Laboratories, Universities, Utilities, and Industry
Recommendation 5.6: As new technologies that impact the architecture of the grid are deployed in the grid, the North American Electric Reliability Corporation (NERC) should develop and the Federal Energy Regulatory Commission (FERC) should approve standards that more specifically address new technologies and ensure that information is available to enable the development of improved modeling and simulation tools.
||Directed to: NERC and then FERC|
|Recommendation 5.7: As more capable and intercompatible simulation tools become available, system planners and operators should use the results and insights that are gained to develop better grid architectures, plans, and operational procedures; they should also inform regulators and policy makers, such as the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC), about potential issues and opportunities for improving grid operations and planning, so that this information can be used to update the regulations and standards.||Directed to: System Planners and Operators, FERC, NERC, Regulators, and Policy Makers|
|Recommendation 5.8: Because there will always be limits to what can be learned through simulation, the Department of Energy (DOE) should choose the most promising new architectures indicated by large-scale simulation studies in order to identify and plan a number of large-scale field experiments that could verify the advantages of such grid architectures under actual operations. Such field experiments of grid architecture would be qualitatively and quantitatively much larger in scope than the usual prototyping of a component such as a storage device, and should be reserved for when adequate resources and opportunities are available.||Directed to: DOE|
|Recommendation 6.2: Owing to the increasing importance of computing, communications, and control technologies for the operation of the current and future grid, Congress should appropriate funds to the National Science Foundation (NSF), in consultation with the Department of Energy (DOE), to specifically focus on research programs exploring the implications and applications of rapidly evolving computing, communications, and control technologies on grid cybersecurity and cyber resiliency.||Directed to: Congress with NSF and DOE|
|Recommendation 6.7: The Department of Energy (DOE) should partner with relevant agencies to develop a joint utility and industry-driven analysis of electric system interdependencies with connected infrastructure (e.g., communications networks, natural gas system) and provide guidelines on how to address the reliability and security vulnerabilities from such interdependencies.||Directed to: DOE|
|2. Ensure that electricity service remains clean and sustainable, and reliable and resilient.|
|Recommendation 3.1: Congress should instruct the Department of Energy (DOE) to create a joint task force that includes the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC), the Electricity Information Sharing and Analysis Center (E-ISAC), and representatives from the electric industry to develop recommendations and identify any new legislative authority that is needed so that the industry and its regulators can understand in a timely manner why a significant physical and/or cyber disruption occurred in the electric power grid. Some mechanisms and institutional capabilities, similar to the data collection and investigative function held and carried out by the National Transportation Safety Board (NTSB) for accident investigations, are needed to provide legal authority to independent investigators to gain access to pertinent data needed to reconstruct the disruption, analyze the data, and deliver reports with lessons learned in a timely manner after the disruption has occurred. (See Recommendation 6.4 for other tasks that would be assigned to this joint task force.)||Directed to: Congress with DOE, FERC, NERC, E-ISAC, and Industry to Implement|
|Recommendation 3.2: Congress should build on the example it set in the electric power system when it established in the Energy Policy Act of 2005, an Electric Reliability Organization with responsibility to set and enforce reliability standards for the electric industry, and authorize the Federal Energy Regulatory Commission (FERC) to designate a central entity to establish standards for and otherwise oversee the reliability of the nation’s natural gas delivery system. Congress should also authorize FERC to require greater transparency and reporting of conditions occurring on the natural gas delivery system to allow for better situational awareness as to the operational circumstances needed to help support electric system reliability.||Directed to: Congress with FERC to Implement|
Recommendation 3.3: Regarding transmission siting, in light of the fundamental ways in which interstate commerce is enabled by the high-voltage, multistate transmission networks in the Eastern and Western Interconnections of the United States and in which transitions in the nation’s electric system increase reliance on remote renewable resources, Congress and the states should support the evolution of planning for and siting of regional transmission facilities in the United States, while recognizing that some developments at the grid edge may partly mitigate the need for new transmission.
Congress should enact legislation to:
There is an urgency to reform regional transmission planning and siting processes, given that in general the process of planning, development, permitting, financing, and construction is lengthy. In any event, and pending action by Congress as recommended above, FERC should update its current transmission planning and cost-allocation rules to ensure that they appropriately take into account the drivers of change in the existing industry and the nation’s needs for appropriate transmission investment, deployment, and cost recovery.
|Directed to: Congress with DOE, FERC, and Others to Implement|
|Recommendation 3.9: Industry and regulatory groups and government agencies—for example, the National Association of Regulatory Utility Commissioners (NARUC), National Association of State Energy Officials (NASEO), Edison Electric Institute (EEI), American Public Power Association (APPA), National Rural Electric Cooperative Association (NRECA), Large Public Power Council (LPPC), Department of Energy (DOE), and others—should collaborate on work to collect and share information on best practices and lessons learned from efforts across the country to promote change and regulatory innovation at the distribution level. DOE should establish and curate a central repository of efforts and lessons learned from across the country to facilitate access to examples of regulatory innovations at the distribution level in collaboration with states, industry, trade groups, and other stakeholders. DOE could accomplish the development and operations of such a repository within a DOE program office or could support a third party (e.g., a national laboratory or a university) to carry out this work.||Directed to: Industry, Regulatory Groups, Government Agencies (Including DOE)|
|Recommendation 4.7: Given the structural, technological, economic, and operational changes under way in so many regions of the U.S. electric industry, it will be important for the federal government to fund and support research and analysis to help mitigate operational and planning uncertainties. The Department of Energy (DOE) should sponsor research that will enhance the temporal flexibility of net electricity demand and enhance other services vital to grid reliability through pricing or other mechanisms. This will be important for supporting the entry of resources and services that can meet states’ and consumers’ desires for low-carbon electricity supply.||Directed to: Administration and Congress, Implemented by DOE|
|Recommendation 5.1: To meet the challenge of dramatically lowering U.S. CO2 emissions, the Department of Energy (DOE), Electric Power Research Institute (EPRI), universities, and industry should focus on developing generation technologies with zero direct CO2 emissions, low-carbon technologies with high dispatchability and fast ramping capabilities, storage systems for multihour, multiday, and seasonal time-shifting, and power electronics to enable real-time control of the grid.||Directed to: DOE, EPRI, Universities, and Industry|
|Recommendation 6.1: The Department of Energy (DOE) research program in grid cybersecurity is an important source of innovation to improve the resiliency of future grid infrastructure and operations. DOE should develop a regularly updated research and development (R&D) priority roadmap in collaboration with the electric industry, with input from academic and national laboratory researchers and the vendor community. The R&D priorities in the roadmap should be funded by appropriations from Congress to DOE. The roadmap should be oriented to develop and demonstrate new technologies for resilient architectures that will enable energy delivery systems, and any interconnected systems, to be designed, installed, operated, and maintained to survive a cyber incident while sustaining critical functionality and enabling quick recovery.||Directed to: DOE Congress in Collaboration with Industry, Academic and National Laboratories, Researchers, Vendors|
|Recommendation 6.3: Congress should appropriate funds to the Department of Energy (DOE), Department of Homeland Security (DHS), and Department of Labor (DOL) to establish programs that provide cybersecurity training specifically for the current and future workforce of engineers, operators, technicians, and information technology (IT) and operational technology (OT) positions associated with the real-time operation of electric grid systems.||Directed to: Congress, with DOE, DHS, and DOL to Implement|
|Recommendation 6.4: Congress should instruct the Department of Energy (DOE) to create a joint task force that includes the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC), the Electricity Information Sharing and Analysis Center (E-ISAC), and the electric industry to identify new legislative authority needed for obtaining early warnings associated with self-reporting security conditions that may potentially disrupt the electric power grid. A mechanism analogous to the independent nonregulatory Aviation Safety Reporting System (ASRS) operated through the National Aeronautics and Space Administration (NASA) is needed to support anonymous reporting and quickly assess and inform relevant decision makers. The intention would be that security audit findings would not incur financial penalties to the reporting entity if the violation was (1) within the scope of a self-reported concern; (2) within the time frame of a correction action timeline; and (3) did not result in any customer outages. (See Recommendation 3.1 for other tasks that would be assigned to this joint task force.)||Directed to: Congress, with DOE, FERC, NERC, E-ISAC, and Industry to Implement|
|Recommendation 6.5: Pertinent information about known and emerging advanced persistent foreign and domestic cybersecurity threats should be communicated to industry stakeholders in a proactive, timely, and effective manner. Department of Energy (DOE), Department of Homeland Security (DHS), Department of Defense (DoD), their partners in the intelligence community, and relevant Information Sharing and Analysis Centers (ISACs), should, in coordination with industry, collectively identify parameters defining the most relevant information to share, and create a process for securely releasing information to industry.||Directed to: DOE, DHS, DoD, ISACs, and Industry|
|Recommendation 6.6: Congress should give regulatory authority to the Department of Homeland Security (DHS), which should work with the sector-specific agencies and other relevant government and industry stakeholders, to establish cybersecurity regulations across all critical infrastructure sectors for equipment, devices, and software used in those sectors. The goal of these regulations is to specify standards that vendors will implement to develop products with superior cybersecurity attributes.||Directed to: Congress, with DHS, Relevant Agencies, and Industry to Implement|
|Recommendation 6.8: Because investor-owned utilities, coops, and municipals cannot, on their own, justify covering the cost of implementing protections of the power system against electromagnetic pulse (EMP) or major state-sponsored cyber and other attacks, Congress should directly address this issue and initiate a process to develop a solution for how to cover the costs of implementing appropriate protections.||Directed to: Congress|
|Recommendation 6.9: Congress should appropriate funds to the Department of Energy (DOE) for the National Association of Regulatory Utility Commissioners (NARUC) to develop guidance for distribution-level resiliency requirements to be implemented at the state and local level, in coordination with the National Rural Electric Cooperative Association (NRECA), American Public Power Association (APPA), Large Public Power Council (LPPC), Edison Electric Institute (EEI), and other relevant stakeholders.||Directed to: Congress, with DOE, NARUC, NRECA, APPA, LPPC, EEI, and Other Relevant Stakeholders to Implement|
|Recommendation 6.10: The Department of Energy (DOE) and Department of Homeland Security (DHS, including the Federal Emergency Management Agency [FEMA]) should expand interactions with industry through exercises, red and purple teaming, and assessments to enhance the electric power system’s security posture. DOE and DHS should provide funding to regional, state, and local entities to support exercises in collaboration with industry to enhance grid cybersecurity incident response.||Directed to: DOE and DHS (Including FEMA) to Work with Industry|
|3. Improve understanding of how people use electricity and sustain the “social compact” that has kept electricity affordable and equitable in the face of profound technological changes.|
|Recommendation 3.5: The decentralization of supply and other transformations of the electric power system could have large impacts on access, costs, benefits, and other qualities of grid service. For this reason, local regulatory bodies—organized by the National Association of Regulatory Utility Commissioners (NARUC) in partnership with the Department of Energy (DOE)—should accelerate and deepen their evaluations of new rate structures and other policies with an eye to how a transforming grid will affect issues of equity. This testing and evaluation should occur on a regular basis, employ techniques grounded in behavioral social science, and lead to an evolution of best practices that address possible inequitable or adverse outcomes. For decision makers at publicly owned utilities, the American Public Power Association (APPA) and the National Rural Electric Cooperative Association (NRECA) should also provide assistance in accelerating such evaluations.||Directed to: NARUC and DOE, to Work with Local Regulatory Bodies, APPA, and NRECA to Implement|
|Recommendation 4.9: The increase in government funding identified in Recommendation 4.8 should include areas that have traditionally been neglected yet are vitally important to the future of the electric power system. Those include research to support planning, design, operation, and control of grid systems as they face new challenges such as deep decarbonization and the need for resiliency against natural, man-made, and cyber hazards. The consortium and multiyear approach of the Grid Modernization Initiative (GMI) is a good model but must be funded reliably. Other traditionally neglected areas of research include the social science needed to inform policy and technology development.||Directed to: Congress|
|Recommendation 5.9: Congress should provide funding for the Department of Labor (DOL), Department of Education, and Department of Energy (DOE) to build on previous experiences in funding workforce training programs (e.g., 2009 Recovery Act Workforce Development, Grid Engineering for Accelerated Renewable Energy Deployment [GEARED], etc.) and provide funding to support vocational, professional, and academic programs to train, retrain, and educate the current and future workforce in the electric utility sector and electrical manufacturing industries. These programs should be implemented in a way that allows for state-of-the-art quantitative analysis of program effectiveness and learning for future policy development.||Directed to: Congress, with DOL, Department of Education, and DOE to Implement|
|Recommendation 5.10: The Bureau of Labor Statistics (BLS), in conjunction with the Department of Energy (DOE), should invest in accurately estimating job numbers in more granular categories of work in industries that are part of the electricity system supply chain of the future. An analysis of the overlap of electricity with other employment sectors is necessary to understand the economic significance of electricity-specific employment changes. Furthermore, an analysis of wage impacts following displacement and/or retraining owing to transition-related job loss is necessary to better address equitable worker transitions. This includes those employed in commissioning and installation as well as end-use manufacturers, with a focus on moving from fossil-focused to renewables and electrification-focused employment.||Directed to: BLS and DOE|
|4. Facilitate innovations in technology, policy, and business models relevant to the power system.|
|Recommendation 3.6: With support from Congress and state legislatures, the Department of Energy (DOE), state energy research organizations, and foundations should provide support for social science research and regulatory/policy analysis designed to identify and assess alternative models for regulation, innovation, and industry structure in the retail/distribution segment of the electric system. Such research and analysis efforts should also address opportunities and mechanisms to allow for flexible demand and the value of doing so for electric system performance, cost, and emissions. Such research and analysis should also focus on the development and assessment of metrics to measure how infrastructure investment decisions and authorized actions would affect carbon emissions. Such work should involve and be informed by industry, researchers at universities, think tanks and/or the national laboratories, and/or other institutions with research programs in the following fields (as well as others): energy economics, behavioral economics, public policy analysis, law, finance, and utility regulation.||Directed to: Congress and State Legislatures, with DOE, State Energy Research Organizations, and Foundations to Implement|
|Recommendation 3.7: The Department of Energy (DOE) should expand its program of providing seed grants to support innovative state programs on making business model and/or restructuring reforms in the retail/distribution segment of the electric industry that (1) allow for and expand opportunities for the safe and secure adoption of innovative technologies, business models, and market designs; and (2) encourage the adoption of best practices.||Directed to: DOE|
|Recommendation 3.8: The states, through the energy and utility regulation committees of their legislatures as well as through their regulatory agencies, should adopt and/or strengthen policies that support the ability of investor-owned utilities and other parties to innovate on business model issues, rate making, and rate design. For publicly owned utilities, the national organizations (i.e., the National Rural Electric Cooperative Association [NRECA], the American Public Power Association [APPA], and Large Public Power Council [LPPC]) and the Department of Energy (DOE) should help fund and/or develop innovative ways for these utilities to operate their distribution systems so that these utilities can leverage the benefits and other implications of new, rapidly evolving technology.||Directed to: State Legislatures, with National Utility Organizations and DOE|
|Recommendation 3.10: Congress should expand funding for loans, loan guarantees, and grants to provide equivalent opportunities for investment in local utility infrastructure development for publicly owned utilities (e.g., municipal electric utilities, cooperative utilities, tribal utility authorities, and special-purpose utility districts), because they do not have access to incentives provided through tax credits to investor-owned utilities and other developers.||Directed to: Congress|
|Recommendation 3.11: State regulators, in conjunction with local electric-industry market participants and grid operators, should accelerate their investigations into what changes in industry structure, security, rate design, and other pricing approaches, and market design are needed to align with significant deployment of distributed energy resources (DER) and to address equity issues in energy access and clean energy. Because these issues are complicated and need to take into consideration various technical and legal requirements for operating a dynamic system on the local grid, the governing boards of publicly owned utilities and the regulators in states that anticipate significant adoption of DER should place a high priority on exploring and stress-testing emerging approaches and making decisions that will inform market participants about the timing and character of changes in retail industry structure, prices, and market design.||Directed to: State Regulators and Industry|
|Recommendation 4.4: Achieving greater deployment of advanced electrical technologies will require states to implement regulatory reforms that allow utilities to recover the costs of larger research and development (R&D) budgets alongside other forms of regulatory approval that encourage more adoption of new technologies. In addition, in a few states that provide direct funding for technology demonstration programs, state policy makers should expand those programs and ensure reliable long-term provision of funds. These programs can be models for other state-based innovation funding, especially where they put attention on the need not just for larger spending but also stronger incentives for adoption of new technologies, including those coming from outside the regulated sector.||Directed to: State Legislatures, with State Regulators to Implement|
|Recommendation 4.6: Greater deployment of advanced electrical technology is essential and will require expanded support for Department of Energy (DOE)-backed demonstration projects, including through loan programs and support for industrial consortia that deploy critical technologies. Such expanded support should follow best practices in the implementation of technology demonstration and deployment programs. Programs should be designed for rapid learning (and course corrections where needed) and periodic assessment of the overall portfolio for its performance. Proposals for funded projects should include a clear articulation of how a demonstration could be commercialized, including a budget for such activities—so that a larger fraction of successful demonstration projects lead to wider deployment.||Directed to: DOE|
|Recommendation 5.3: The Department of Energy (DOE), Electric Power Research Institute (EPRI), other domestic and international research organizations, universities, and worldwide industry should develop relevant supporting information and communications technology (ICT) to permit (1) secure, reliable, private, and fast communication; and (2) security, safety, accuracy, privacy, and speed in computation, so as to incentivize various asset owners to participate in a retail market structure that allows distributed energy resources (DER) to participate and be compensated for distributed generation, grid support services, and/or flexible load consumption.||Directed to: DOE, EPRI, Other Research Organizations, Universities, and Industry|
|5. Accelerate innovations in technology in the face of shifting global supply chains and the influx of disruptive technologies.|
|Recommendation 3.4: In recognition of the changes under way in the electric industry, when Congress and state legislatures enact new policies and incentives to stimulate and/or encourage investment in nascent clean-energy or the early phases of deployment of new advanced grid technologies, legislatures should design such policies and incentives so that they phase out on predictable schedules as the penetration of such technologies increases over time.||Directed to: Congress and State Legislatures|
|Recommendation 4.2: In light of the globalization of the electric equipment supply industry, and with it the globalization of much of the innovative activity in the industry, the United States needs to develop better regulatory tools and capabilities for dealing with imported equipment and cross-border ownership of firms producing critical equipment. The Department of Energy (DOE) should consult with the National Security Council (NSC) and explore whether there is need for more extensive cross-department collaboration, including the Departments of Commerce and State, to set standards for imported equipment and cross-border investments, along with implementation of those standards. Any effort in this area will need to establish a few standards for control over imported equipment along with incentives for advancing U.S. manufacturing where it is essential to have these capabilities in U.S. industry. An effective control program should begin with a narrow list of critical technologies for which U.S. (or U.S.-oriented) manufacturing and control over supply chains is established. For a small number of critical technologies, such as high-voltage transformers and grid protection and control systems, the United States must maintain the capacity to innovate and manufacture on its own territory.||Directed to: DOE, in Consultation with NSC, Departments of Commerce and State|
|Recommendation 4.3: Because today the large potential for benefits from international collaboration in the domain of precompetitive energy research and technology development is not being tapped effectively, the United States should devise strategies to support and encourage such collaborations, while remaining mindful of national differences in attitudes toward intellectual property and technology policy. The White House should establish an interagency process under which the Departments of State, Homeland Security, Commerce, and Energy review all arrangements that limit such international research collaborations and make prudent reforms to allow for greater precompetitive researcher interactions between U.S. scholars and researchers in other countries.||Directed to: White House, with DOS, DHS, DEC, and DOE|
|Recommendation 4.8: In order to meet the challenge of serving all Americans with safe, clean, affordable, reliable, and resilient electric power in a rapidly changing environment, while building a stronger U.S. industrial base that can advance those goals, Congress should increase substantially the overall level of support for research, development, and demonstration (RD&D) on the production, delivery, and use of electric power. Increasing such support too rapidly would lead to inefficiency and waste. This sets an upper bound on the rate and amount of increase. Over the next decade, support for basic science that is broadly related to electric power should be doubled, and support for applied development and demonstration related to electric power should be tripled.||Directed to: Congress|
|Recommendation 5.2: The United States has lost ground in the manufacturing of conventional grid-scale power control technologies (e.g., high-voltage direct current [HVDC] and flexible alternating current transmission system [FACTS]) and is deploying very little of these advanced solutions. Developments in rapidly growing technologies, such as photovoltaics (PVs), wind, electric vehicles (EVs), and energy storage, suggest that a new paradigm may be rapidly emerging that is more modular, distributed, and edge-intelligent, and that may be able to compete with and outperform the existing grid paradigm in terms of sustainability, reliability, resilience, and affordability. A rapidly changing paradigm for electrical power and the grid offers a unique opportunity for U.S. research and manufacturing to reclaim their global lead in this critical area. The Department of Energy (DOE), Electric Power Research Institute (EPRI), other domestic and international research organizations, universities, and worldwide industry should identify such “breakaway” threads early, and work with industry, investors, and regulators to understand potential roadmap and impact. Then, DOE, EPRI, and industry should collaborate to develop and fund a research agenda that creates fast-moving programs that help to de-risk such solutions from technology, market, and regulatory perspectives.||Directed to: DOE, EPRI, Other Research Organizations, Universities, and Industry|
|Recommendation 5.4: The Department of Energy (DOE), Electric Power Research Institute (EPRI), other domestic and international research organizations, universities, and worldwide industry should support the development of new suites of technologies that can enable the high levels of automation needed in a future grid. These include (1) ultra-automation strategies to allow millions of edge-intelligent devices (e.g., fast-responding inverters) that coordinate in real time in a secure manner; (2) technologies grounded in power-electronics, communications, computing, and control to ensure a cyber-enabled, distributed energy resources (DER)-rich distribution grid that ensures resiliency and reliability, with the bulk-power system transporting low-cost energy as needed; and (3) technologies that enable a resilient cluster of electrical islands interconnected through direct current (DC) or controllable alternating current (AC) links.||Directed to: DOE, EPRI, Other Research Organizations, Universities, and Industry|