Distribution

The traditional power grid consists of large generation facilities (such as natural gas power plants or wind or solar farms), high-voltage transmission lines that bring power to cities and towns, and a network of distribution lines that deliver electricity to millions of homes and businesses. The last step, local distribution systems, includes step-down transformers that reduce the high-voltage power from transmission lines, above-ground and underground transmission lines that move power around the area, and a final network of lower-voltage lines that connect each end user to the grid. The U.S. electric grid currently contains approximately 6.3 million miles of local distribution lines.¹

The future distribution system will have new demands as we integrate distributed energy resources (such as rooftop solar, energy storage, and automated demand management) into our energy system and add EV charging. The distribution grid of tomorrow must manage two-way flows of electricity (to accept power from solar or batteries on the customer’s side of the meter), integrate automated demand response capabilities to reduce peak electricity demand, and manage EV charging while maintaining power quality 24 hours a day, 365 days a year. Upgrading and increasing the capacity of distribution systems is essential for the energy transition.

• Substations with step-down transformers (and supporting hardware such as circuit breakers) change high-voltage electricity from transmission lines to a lower voltage. The path from high-voltage transmission lines to homes will include transformers where voltage is reduced.

• Distribution lines deliver electricity to the end-user. These local lines cover shorter distances than transmission lines at a much lower voltage. While high-voltage transmission lines carry electrical currents over hundreds of miles, distribution lines are short and run above or underground, delivering electricity directly to every customer in the distribution network.

• Distribution automation (DA) technologies improve the efficiency of the distribution network by automating measuring, monitoring, and control of electrical loads, reducing costs, and increasing the speed and accuracy of distribution system processes.

• DA technologies include remote sensors, processors, information and communication networks, and switches.

• Advanced Distribution Management Systems collect, organize, display, and analyze real-time distribution system data and inputs to enhance system efficiency, improve reliability, and prevent overloads.

  
  

• Low voltage distribution equipment (LVDE) carries electricity to consumers at a lower voltage, typically less than 600 volts.

• LVDE technologies include arc-fault circuit interrupters, molded case circuit breakers, panelboards, distribution boards, switches, and busways.

  
  

• Smart meters and smart controls digitally monitor and report electricity usage by end-users and provide remote, automated management of loads.

• Inverters convert electrical currents from AC to DC or vice versa.

• Distributed energy resources (DERs) (small solar systems, battery storage including EV batteries, and microgrids) are customer resources that, when integrated into the distribution grid, support supply and demand balancing and grid stability. Technologies that enable DER capabilities include digital, grid-connected controls on DER components, such as smart chargers, smart inverters for solar generation, and smart HVAC, heat pump, and water heater controls that enable automated demand reduction.

The distribution grid must be upgraded to respond to increased incidents of extreme weather, the ramp-up of EV charging, and continued deployment of distributed energy resources. These new challenges add to the reality that the system is aging, with 70% of the lines and transformers more than 25 years old. Current investment is substantial but must be expanded:

• In 2019, U.S. utilities invested a total of $51 billion to replace, modernize, and expand the electricity distribution system, according to the Energy Information Administration (EIA), a 6% increase over 2018 and a 64% increase over the annual spending in 2000 (inflation-adjusted).²

• According to a study by the American Society of Civil Engineers, the U.S. needs to invest an additional $208 billion by 2029 to just maintain the U.S. grid, with $48 billion needed specifically for the distribution system.³

• Estimates of fully modernizing the U.S. grid, including replacing aging infrastructure, expanding it to reflect new needs, and preparing for extreme weather, could require $1 trillion or more by 2050.⁴

• An estimated $36 trillion in global transmission and distribution investments is needed between 2020 and 2050 to reach net-zero across the energy sector.⁵

• A report from the Energy Transitions Commission estimated that to achieve overall electrification goals for transportation and other sectors while decarbonizing the global electricity supply will require a cumulative investment of $36 trillion, or an average of $1.1 trillion per year, in the global grid. (Figure 1)

FIGURE 1. DECARBONIZING THE GLOBAL ECONOMY: NETWORK INVESTMENT PROFILE FOR DISTRIBUTION AND TRANSMISSION 2020-2050.

• Scale of the challenge: Reconfiguring an aging distribution grid to manage new intermittent renewable resources, new power needs such as EV charging, and integrating and optimizing the addition of DERs is a massive shift for a system that is already under pressure due to aging equipment, extreme weather, and the fundamental challenge of providing reliable power to 150 million customers.

• Balkanization: There are over 3,000 distribution utilities providing distribution services, regulated by 50 state public utility commissions (PUCs), making consistent implementation of technology upgrades difficult and slow. Responsibility for maintenance of the grid and inter-regional connections is shared by the utility, its regulator, and regional grid operators, leading to confusion and conflict over needed modernization and cost sharing.

• Local peak load estimates could far surpass national averages as different regions adopt EVs at varying rates.⁶ Distribution system upgrades must consider how their locality will differ from national EV uptake projections and demand.

• Siting and permitting challenges constricting the growth of transmission and distribution assets need to be addressed to meet the Biden Administration’s goal of net-zero electricity by 2035.

• Increased frequency and intensity of weather events from climate change pose a threat to the physical elements of transmission and distribution systems, particularly in certain vulnerable geographies where cables could be significantly damaged, imposing high costs and blackouts.⁷

• Full and rapid implementation of the grid support provisions of the Infrastructure Investment and Jobs Act (IIJA), which provides:

• $5 billion in funding through 2026 to support grid hardening activities to protect the grid from extreme weather, wildfires, and other natural hazards.

• $5 billion in funding through 2026 for the demonstration of grid resiliency technologies such as energy storage and microgrids.

• $3 billion in matching grants to accelerate the integration of smart grid technology into transmission and distribution systems.

• Funding for energy improvements in rural or remote areas, providing funds eligible for tools and projects that improve the cost-effectiveness of transmission and distribution systems or address siting and upgrading transmission and distribution lines.⁸

  
  

• Full and rapid implementation of the Inflation Reduction Act, which provides over $270 billion in new tax credits for clean energy, including distributed solar, energy storage, and microgrids. It also provides $9.7 billion to improve the reliability and resilience of rural electric systems.

• Additional federal and new state programs to support smart, two-way local distribution systems that can integrate both centralized and distributed intermittent resources.

• Robust demand reduction markets and other demand management incentives, coupled with full integration of demand reduction into grid management, to reduce peak demand and ease the burden on the distribution system as EV charging increases.

• Federal leadership, including legislation to create incentives and mandates for minimum grid modernization capabilities to support integration of intermittent renewables and full deployment of microgrids, storage, demand reduction, distributed generation, and other components of an optimized, reliable decarbonized grid.

NEMA Technologies

• Distribution Automation Technologies
• Sensors
• Processors
• Information and Communication networks
• Switches
• Low Voltage Distribution Equipment (LVDE)
• Molded case circuit breakers
• Panelboards
• Distribution boards
• Switches
• Busways
• Transformers