Message from the Secretary

2020 Smart
Use this space for the introductory language that would generally go in a transmittal letter,
followed by a list of those Members of Congress to whom the report will be sent.

Pursuant to statutory requirements, this report is being provided to the following Members of

Grid System
Congress:

• The Honorable Member of Congress

Title, House or Senate Committee

•
Report
The Honorable Member of Congress

Title, House or Senate Committee

• The Honorable Member of Congress

Title, House or Senate Committee

•
January 2022
The Honorable Member of Congress

Title, House or Senate Committee

If you have any questions or need additional information, please contact me or Mr. Brad
Crowell, Assistant Secretary for Congressional and Intergovernmental Affairs, at (202) 586-
5450.

Sincerely,

United States Department of Energy

Washington, DC 20585
 Department of Energy |January 2022

Executive Summary
This report conveys the status of smart grid deployments across the Nation, the capabilities
they provide, and the challenges remaining as we move forward with the modernization of the
electric grid. Under section 1302 of the Energy Independence and Security Act of 2007 (EISA)
(Public Law 110-140, 42 U.S.C. 17382), the U.S. Department of Energy’s (DOE) Office of
Electricity is required to report on the status of smart grid deployments and related challenges
every two years.

The electric grid has evolved considerably over the past 10 years. The American Recovery and
Reinvestment Act of 2009, representing billions of federal dollars matched with private money
to support over 130 projects across the country, provided a powerful stimulus to the
deployment of smart grid technologies. The systems deployed enabled utilities to improve the
effectiveness and efficiency of their operations, particularly related to reducing the frequency
and duration of power outages, providing finer control of operating parameters (e.g., voltage),
and enabling greater customer participation in the management of their electricity through the
application of advanced metering infrastructure. In 2019, electric utilities spent $80 billion on
capital improvements within the transmission and distribution systems, while investments in
smart grid technology in 2018 amounted to $6.4 billion (compared to $3.4 billion in 2014) and
are forecasted to grow to $16.4 billion annually by 2026.

Over the past five years, we have witnessed accelerated deployment in renewable energy
resources and the emergence of a set of technologies, such as electric vehicles, grid-interactive
buildings, and microgrids, which are becoming increasingly deployed at the grid edge. These
technologies, which consumers and technology service providers often own and control, are
introducing significant complexity and uncertainty to grid planners and operators. Due to the
changing resource mix and industry composition, the electric grid must now evolve to a new
operating structure with advanced functional capabilities; it will now need to manage variable
power output, fluctuating and unpredictable load patterns, and bidirectional power flow, a as
well as enable novel grid designs. It will also require effective, time-dependent coordination
among all participants (utilities, market operators, and emerging players) to ensure the reliable
operation of essential and evolving grid functions. The existing electric grid was not designed to
handle these new demands and will require significant re-engineering involving advancements
in both technology and institutional planning processes. Smart grid technology and strategies
for deploying it are essential to address this new, evolving complexity.

What makes the grid “smart” is essentially the application of digital, cyber infrastructure
working with the physical system to perform the functions of sensing, communications, control,
computing, and data and information management to inform planning and operations.

a
The electric grid was originally designed to deliver electricity from centrally located power plants to customers
through the electric grid infrastructure. The production of power from customer-owned assets, e.g., from rooftop
solar systems, introduces the need to manage bidirectional flow of electricity, which the grid was not originally
designed to accommodate.

Smart Grid System Report 2020 | Page ii

 Department of Energy |January 2022

It includes the convergence of computing and operations (IT/OT convergence b) to provide

intelligence to human operators and enable autonomous functions where needed. Utilities
have deployed digital devices for several decades, but the transition to a more distributed and
interactive system will necessitate greater levels of sophistication in the application of smart
grid technology.

As the grid evolves, we will need to build out a core cyber-physical, electric platform that will
ensure an ability to serve multiple purposes (e.g., resilience, security, efficiency, affordability)
while addressing uncertainty with regard to future technological options and changing
customer preferences and policies. In addition, we will need to plan for the convergence of the
electricity infrastructure with other systems, such as the transportation, building, natural gas,
telecommunications, and even social-networking infrastructures.

Even though the Recovery Act c accelerated the use of smart grid technology, we now face a
dramatic structural transformation as the trend toward decentralization with greater customer
participation combined with increased use of renewable energy will shape future grid designs.
These trends are not happening uniformly across the country but in areas where favorable
policies exist. The ability to manage the transformation will require technological and
institutional solutions and an industry that can organize sufficiently to make them possible. This
report provides a look at both technological and institutional trends and related challenges
associated with deploying the smart grid. Key findings and recommendations include:

1. The proliferation of a variety of distributed energy resources (DERs), d often not owned
by the utility, shifts the operational paradigm from one of control to one of control and
coordination.
Coordination is the process that causes or enables a set of decentralized elements to
cooperate in solving a common problem, for example, working together to undertake a
specific grid operation. As DERs begin to influence how we generate and use electricity,
we will need to institute processes that can effectively coordinate grid planning,
operations, and market design/implementation not only among utility and nonutility
participants but also across federal and state jurisdictions.

b
The convergence of information technology (IT) and operations technology (OT).
c
The American Recovery and Reinvestment Act of 2009.
d
DERs are resources sited close to customers that can provide all or some of their electric power needs or can be
used by the system to either reduce demand (such as improve energy efficiency) or provide supply to satisfy the
energy, capacity, or ancillary service needs of the grid. The resources are small in scale, connected to the
distribution system, and physically close to the load. Examples of DER types are solar photovoltaic (PV), wind,
combined heat and power (CHP), energy storage, demand response (DR), electric vehicles (EVs), microgrids, and
energy efficiency (EE).

Smart Grid System Report 2020 | Page iii

 Department of Energy |January 2022

A focus on improving coordination is occurring, but is in an early stage, especially among

regional system operators and states. Coordination frameworks, however, are needed
to delineate the respective roles and responsibilities of all participants within the bulk
power, distribution, and customer system domains.

A September 2020 order of the Federal Energy Regulatory Commission (FERC Order
2222), allowing DER aggregators to participate in wholesale markets will require
intricate coordination schemes that transverse the transmission-distribution systems
boundary. Such coordination will guide observability, communication, and control
requirements needed for both normal and contingent circumstances. Effective
coordination will involve structural designs that can also permit local and system-wide
optimization in real time.

2. Grid modernization is an essential component of an integrated planning process.

38 states and the District of Columbia have completed or are undertaking some form of
grid modernization activity that includes the deployment of smart grid technology,
DERs, or both. Planning processes at the state level are evolving with regard to
incorporating the application of smart grid technology and DERs into more holistic
integrated plans; five states now mandate integrated distribution plans (IDPs) and
others are following suit. To enhance the robustness of IDPs, DOE has worked with state
regulators and utilities over the past several years to institute consistent practices for
determining grid modernization strategies that include examining functional and
structural requirements needed over time to better inform technology implementation
roadmaps. Continued engagement in this area is needed, as are efforts to enable the full
integration of planning processes across the bulk power and distribution systems
boundary.

3. A whole-systems approach to resilience planning is needed to inform smart grid

investments.
Electric utilities typically improve the reliability and resilience of their systems through
prudent asset management practices (e.g., assessing and replacing aged or damaged
equipment) and protection schemes that can automatically isolate or reroute power
flow to reduce equipment damage and minimize outages to customers. Strategic efforts
are now required to address, a) vulnerabilities associated with interdependencies
between the electric grid and other infrastructures; b) the protection of critical civilian
and defense functions; and c) needed improvements in resilience that novel grid
configurations, such as microgrids and minigrids, might provide. For example, the
analysis of infrastructure interdependencies made possible through the application of
DOE’s North American Energy Resilience Model could inform regional strategies to
improve resilience.

Smart Grid System Report 2020 | Page iv

 Department of Energy |January 2022

Developing such resilience strategies will require involving stakeholders, from many
levels of government and the private sector, in planning and analytical processes to
determine and prioritize options. Strategic resilience planning as a component of an
integrated planning process is a new consideration and will require the development of
threat-based risk assessment methodology for the electric power industry. The
formulation of grid modernization strategies is an outcome of such planning processes
and would involve the deployment of smart grid systems to ensure operational
requirements related to observability, communications, flexibility, and control.

4. Research and development combined with technology demonstrations focused on

system integration are required to enable the transition from legacy to more advanced
grid infrastructures.
Utilities are understandably cautious as they test and install new systems that must
integrate effectively with legacy infrastructure and perform to meet stringent
requirements. Testing, demonstrating, and deploying new systems can take more than
10 years. To effectively advance the application of new technologies needed to ensure
grid modernization, more efforts are needed to test and demonstrate the integration of
new concepts in realistic environments. Executing the provisions of the Infrastructure
Investment and Jobs Act, signed into law on November 15, 2021, will support such
efforts. Research, development, and demonstration (RD&D) is needed in the following
areas:

• The advancement of solid-state materials and components to improve the

performance of power electronics devices needed to control the flow and
characteristics of electricity as we become more reliant on renewable and
distributed resources.
• The development of novel electrochemical approaches to improve the
performance and reduce the cost of energy storage devices while minimizing
reliance on scarce or critical materials.
• The development and demonstration of low-cost, multiparametric sensors and
supporting platforms that can provide observability of grid assets and the state
of the system to support highly dynamic grid operations.
• The implementation of methods to enable the exchange of data using
standardized data formats across disparate systems combined with providing
technical support to utilities to advance data analytics practices across the
industry.
• The advancement of communications networks that are scalable and support
multiple functions (e.g., real-time control of DERs and automated feeder
switching).
• The demonstration of grid architectures that address operational control,
coordination, and scalability issues as the electric grid begins to accommodate

Smart Grid System Report 2020 | Page v

 Department of Energy |January 2022

many more distributed assets and participants with potentially conflicting

objectives.
• The development of more powerful grid modeling and simulation tools that use
stochastic methods to aid in planning and examining technological options under
variable and uncertain circumstances.
• The advancement of technology to prevent, detect, and mitigate the risk of
cyber intrusion into electricity system operations.

5. Managing cyber risks is key to enabling the smart grid.

As grid operators increasingly rely on the data from digital devices and third-party
systems to make real-time operating decisions, cyber risks are possible through the
following pathways:

• Digital devices connected to the enterprise network might have remote access
capabilities and often are connected to corporate business networks. With
interconnected systems, cyberattacks can migrate from these digital devices to
corporate business networks and in the other direction, permitting remote
access to intruders.
• Grid-edge devices, such as customer-owned DER, are being integrated with
utility and third-party systems. Although this integration is necessary to manage
grid complexity, it marks an enormous expansion of the number of entry points
for malicious actors.
• Wide-area monitoring and control equipment rely on global positioning system
(GPS) clocks for extremely precise timing data. Malicious actors might
manipulate GPS signals that could disrupt grid operations.
• Supply chain risks can translate to cybersecurity risks for IT/OT technology due to
the global nature of manufacturing. This broad-based sourcing increases the
opportunity for malicious code to be introduced into equipment during the
manufacturing process that can impair safe and reliable grid operation.
Preventing cyber intrusion will require reducing or eliminating these various forms of
entry. Critical infrastructure protection standards used by the bulk-power system
(approximately 100 kV and above), including generation and transmission systems, are
well established and enforced by the North American Electric Reliability Corporation
(NERC) and FERC. Cybersecurity standards and practices, however, are not well
established at the distribution system level, where oversight is primarily the
responsibility of state-level public utility commissions. Methods for undertaking risk
assessments of cyber threats should continue to be advanced, and they should be
incorporated more routinely into electric industry planning processes.

Smart Grid System Report 2020 | Page vi

 Department of Energy |January 2022

6. Achieving plug-and-play interoperability will remain a challenging and long-term task.

Interoperability is the ability to safely, securely, and effectively exchange and use
information among two or more devices and systems. This means the myriad devices
and systems deployed on the grid need to function in coordination under, potentially, a
wide variety of operational situations.

Achieving true plug-and-play interoperability, that is, having devices work perfectly
when first used or connected without significant reconfiguration or adjustment of grid
systems, will continue to be a challenging and long-term task. This is due in part to
decades of incremental modifications to grid systems, which has resulted in a mixture of
protocols the industry uses to communicate and share data. In addition, utilities have
typically relied on customized, proprietary solutions provided by technology vendors to
build their systems. Significant efforts to develop and institute industry standards
continue, so that disparate systems can communicate, and new devices can cooperate
within the operational environment of the grid.

Standards development efforts typically have been limited in scope, however, and
generally have not addressed whole-system integration. The National Institute of
Standards and Technology is now developing a set of interoperability profiles to provide
a more holistic view of how devices and systems need to cooperate for given situations.
These profiles draw from industry standards to establish a common set of well-defined
interoperability requirements that can be verified through testing and certification
programs, easing system integration challenges.

Industry is expending significant effort to apply software solutions (e.g., middleware) to

enable interoperability between disparate devices and systems. Even so, interoperable
systems are nascent. The long-term solution for seamless interoperability could involve
building out a standards-based sensor/communication platform that can take advantage
of modern networking technology and provide multiple connection points for devices
and applications. Such a platform combined with standards and security protocols
would permit authorized devices and software to access the platform for data and to
communicate with each other in a structured, but flexible environment. Evolving current
legacy systems so they can apply a sensor/communication platform is a long-term
undertaking that will require significant RD&D and coordination with industry
stakeholders. Such a platform would enable future grid capabilities, including
knowledge transfer and machine learning among smart devices.

7. The composition of workforce skills needs to evolve to support new grid technologies.

The industry’s approximately 603,000 employees are spread across the three types of
utilities—investor-owned utilities (IOUs), public power including municipal utilities, and
rural electric cooperatives. Developing a pipeline of qualified and diverse employees to
support a more complex electric grid will be essential to the electric sector’s
technological transition. After large waves of retirements over the past decade, the rate

Smart Grid System Report 2020 | Page vii

 Department of Energy |January 2022

of retirement attrition is stabilizing. The skills required to plan, build, and operate the
future grid effectively are changing rapidly, however, due to smart grid technology
deployments and the changing grid resource mix. In particular, the pervasive application
of digital technology is requiring more highly skilled workers and engineers, particularly:

• System architects
• Data scientists (for data management and analytics)
• Modeling and simulation experts
• IT/OT cybersecurity specialists
• Communications engineers
• Digital control engineers
As retirements have slowed, nonretirement attrition is emerging as a serious challenge
for maintaining a pipeline of a qualified workers. Younger workers in the 23- to 37-year
age group have the highest attrition rate (57 percent) due in part to competition with
the broader technology industry. Additional efforts in training and education are needed
to attract and adapt a smart grid workforce. Recommendations include:

• Augmenting K-12 STEM (science, technology, engineering, and mathematics)

education programs that build interest in electrical engineering subjects and
emerging energy sector topics, such as electric vehicles, microgrids, and data
science.
• Designing university programs in power systems engineering that engage
students in real-world applications and provide an additional focus on cutting-
edge grid technologies.
• Expanding the availability of continuous education courses that enable active
engineering professionals to adapt to rapid industry changes brought about by
grid transformation.
• Hiring and retaining workers with knowledge of digital technologies.

The electric grid is considered as an ultra-large-scale system, much like natural ecosystems and
cities, in that it is faced with a) inherently conflicting and diverse requirements; b) decentralized
data, development, and control; c) continuous evolution and deployment; d) heterogeneous,
inconsistent, and changing elements; and e) normal failures. This complexity is becoming more
pronounced as consumers shift from being users of the grid to becoming elements of it, along
with technology providers offering grid services that utilities traditionally supply.

In addition, we must consider the role of the electric grid, within a larger societal context, in
achieving environmental sustainability, economic efficiency, and the delivery of equitable
benefits across diverse populations (e.g., disadvantaged communities). The President’s
Executive Order 14008 highlights the need to address global climate change and equity in
tandem through a coordinated, yet just, effort to decarbonize our energy system. As we
undergo a clean energy transition, it will be important to ensure equitable access to

Smart Grid System Report 2020 | Page viii

 Department of Energy |January 2022

infrastructure, services, and associated benefits and opportunities as the electric grid evolves to
address the climate change challenge.

The challenges we face are both technological and institutional in nature. We need to advance
technological capabilities and help decision makers with methods and tools so they can craft
grid modernization strategies that deploy them in practical ways to meet future demands. This
effort will require instituting the appropriate technology, processes, and design considerations
to maintain a stable, coherent, and manageable grid system as it evolves, and to do so in a way
that addresses the increased level of complexity and uncertainty presented by continual
technological advancement, policy shifts, and changing customer preferences. In the end, such
strategies need to consider reliability, efficiency, security, resilience, affordability, and energy
justice as outcomes.

Smart Grid System Report 2020 | Page ix

 Department of Energy |January 2022

SMART GRID SYSTEM REPORT 2020

Table of Contents
Executive Summary ..................................................................................................... ii
I. Legislative Mandate ........................................................................................... 1
II. What Is the Smart Grid?.................................................................................... 3
A. Evolution to Digital Sensing and Control ................................................................................... 5
III. Factors Shaping Smart Grid Deployments ............................................... 13
A. Technology Availability ................................................................................................................. 13
B. Federal and State Policies ............................................................................................................. 18
C. New Participants and Evolving Business Models ................................................................ 24
D. Convergence ....................................................................................................................................... 28
E. Resilience ............................................................................................................................................ 29
F. Implications for Grid Modernization ........................................................................................ 31
IV. Investments and Technology Applications.............................................. 36
A. The Transmission System ............................................................................................................. 38
B. The Distribution System ................................................................................................................ 48
C. Customer Systems............................................................................................................................ 59
V. Challenges ........................................................................................................... 76
A. Coordination ...................................................................................................................................... 77
B. Integrated Planning......................................................................................................................... 81
C. Energy Justice .................................................................................................................................... 86
D. Research, Development, and Demonstration Needs .......................................................... 87
E. Interoperability............................................................................................................................... 106
F. Cybersecurity ................................................................................................................................... 118
G. Workforce ......................................................................................................................................... 122
VI. Conclusion........................................................................................................ 135
VII. Appendices ...................................................................................................... 137
Smart Grid System Report 2020 | Page x
 Department of Energy |January 2022

A. Factors Shaping Smart Grid Deployments (Section III) .................................................. 137

B. Investments and Technology Applications (Section IV) ................................................. 137
C. Challenges (Section V).................................................................................................................. 140

Smart Grid System Report 2020 | Page xi

 Department of Energy |January 2022

I. Legislative Mandate
The U.S. Department of Energy (DOE) Office of Electricity prepared this Smart Grid System
Report as required by Title XIII, Section 1302, of the Energy Infrastructure and Security Act of
2007 (EISA) (Public Law 110-140, 42 U.S.C. 17382). e The EISA directs DOE to submit a biennial
report to the U.S. Congress:

“…concerning the status of smart grid deployments nationwide and any regulatory or
government barriers to continued deployment. [In addition] the report shall provide the
current status and prospects of smart grid development, including information on
technology penetration, communications network capabilities, costs, and obstacles. It
may include recommendations for State and Federal policies or actions helpful to
facilitate the transition to a smart grid.”

Title XIII, entitled “Smart Grid,” states that the policy of the United States is to support the
modernization of the Nation’s electricity transmission and distribution system to maintain a
reliable and secure electricity infrastructure that can meet future demand growth and to
achieve the following:

• Increased use of digital information and controls technology to improve reliability,

security, and efficiency of the electric grid.
• Dynamic optimization of grid operations and resources, with full cybersecurity.
• Deployment and integration of distributed resources and generation, including
renewable resources.
• Development and incorporation of demand response, demand-side resources, and
energy-efficiency resources.
• Deployment of “smart” technologies (real-time, automated, interactive technologies
that optimize the physical operation of appliances and consumer devices) for metering,
communications concerning grid operations and status, and distribution automation.
• Integration of “smart” appliances and consumer devices.
• Deployment and integration of advanced electricity storage and peak-shaving
technologies, including plug-in electric and hybrid electric vehicles, and thermal-storage
air conditioning.
• Provision to consumers of timely information and control options.
• Development of standards for communication and interoperability of appliances and
equipment connected to the electric grid, including the infrastructure serving the grid.
• Identification and lowering of unreasonable or unnecessary barriers to adoption of
smart grid technologies, practices, and services.

e
Title XIII resides within Sections 1301–1309 of EISA. Energy Independence and Security Act of 2007, Pub. L. No.
110-140, 121 Stat. 1492 (2007), https://www.energy.gov/oe/downloads/title-xiii-smart-grid-sec-1301-1308-
statement-policy-modernization-electricity-grid.

Smart Grid System Report 2020 | Page 1

 Department of Energy |January 2022

DOE has continued to work closely with the electric grid industry, including policymakers,
regulators, and utilities, to better understand and address both technological and institutional
issues related to the advancement of smart grid technology in the context of grid
modernization. In addition, we have sought input in shaping the report from the DOE Electricity
Advisory Committee and staff from other federal agencies in the Federal Smart Grid Task Force,
including the U.S. Department of Homeland Security, the Federal Energy Regulatory
Commission (FERC), and the National Institute of Standards and Technology (NIST).

Worth noting is that multiple factors affect the adoption of smart grid technology including, a)
the availability of technology, that is, the combination of favorable prices and commercial
service; b) policy drivers, often specific to states or regions, that create incentives or mandates;
and c) the need of utilities or regional operators to deploy more advanced grid capabilities. As a
result, smart grid technology is not being deployed uniformly across the country, but rather in
areas where such investments seem warranted. Nevertheless, a complex set of emerging
factors will require more intelligent and responsive electrical systems.

This report discusses these factors and presents challenges affecting the implementation of the
smart grid. The report is subdivided, as follows:

• II. What Is the Smart Grid – the evolution toward a cyber and physical technology
platform to perform the functions of sensing, communication, control, computing, and
data/information management to inform grid planning and operations.

• III. Factors Shaping Smart Grid Deployment – tightly interconnected forces across
technology, market, and policy areas collectively driving grid transformation, imposing
requirements for advanced functional capabilities, and ultimately shaping how utilities
and regulators determine the ways to apply smart grid technology.

• IV. Investments and Technology Applications – smart grid investment levels and uses of
technology in the context of transmission, distribution, and customer electric and cyber
systems.

• V. Challenges – advancements needed in grid coordination, planning, and technology,

along with research, development, and demonstration (RD&D), standards,
cybersecurity, and workforce efforts necessary to support a more complex and dynamic
grid.

• VI. Conclusion.

• VII. Appendices – supporting information.

Smart Grid System Report 2020 | Page 2

 Department of Energy |January 2022

II. What Is the Smart Grid?

The North American power grid is a vast and complex machine with 1.2 million megawatts
(MW) of electricity generating capacity1 that delivers electricity to 330 million people 2 across
nearly 600,000 circuit miles of transmission lines and 5.5 million miles of distribution lines. 3
Power flow, the frequency of alternating current,
and voltage levels are continuously maintained What is being sensed or controlled
and adjusted in precise ways across the grid. on the grid?
Managing the generation and delivery of While smart grid technology can be complex, the
electricity involves thousands of organizations, physical phenomena it measures or controls are
including 77 balancing authorities, seven
4 largely limited to voltage, current, and
independent system operators / regional frequency. Digital devices sense and process the
relationships and properties of each electrical
transmission organizations (ISOs/RTOs), 5,f four parameter to increase situational awareness for
federal power marketing organizations, 6 and over grid operators or to initiate automated control
2,786 distribution utilities 7 regulated by various actions that regulate system voltage, reconfigure
entities [the Federal Energy Regulatory Committee circuits, or interrupt power when a problem
(FERC), state public utility commissions, and local occurs.
boards]. The power grid continues to evolve in
response to new demands and requirements.

One aspect of the grid that makes it “smart” is the cyber infrastructure that works with the
physical system to perform the functions of sensing, communication, control, computing, and
data/information management. Another key aspect is the intelligence it can provide to human
planners and operators for undertaking immediate and long-term management decisions.
Sometimes, the operations must occur in such short timescales they are performed
automatically (machine-to-machine). Figure 1 provides a reference for the temporal granularity
needed for grid operations and planning.

f
Utilities formed ISOs/RTOs to coordinate, control, and monitor the operation of the interstate grid for regions of
the United States.

Smart Grid System Report 2020 | Page 3

 Department of Energy |January 2022

FIGURE 1. TIMESCALES IN ELECTRIC GRID OPERATIONS

Source: A. von Meier, Integration of renewable generation in California: Coordination challenges in time and space 8

As discussed in the following section, the electric grid cyber infrastructure has evolved due to
enabling technology advances and new demands. The rate of transition from legacy grid
equipment to smart grid technology depends on a host of regulatory, market, policy, and
technology forces specific to each utility, and on each utility’s operational objectives. Utility
assets typically have a long-expected lifespan. The rate and cost of smart grid deployment is
contingent upon the ability to incorporate more advanced capabilities on legacy equipment.
Smart grid capabilities might be introduced as aging equipment is replaced, or during
infrastructure upgrades to meet objectives such as resilience, reliability, efficiency, distributed
energy resource (DER) integration, or regulatory or policy requirements.

Although the deployment of specific smart grid technologies varies widely across state and
utility footprints, the grid is evolving from a static structure with few participants with
centralized control, to a dynamic structure with many participants and complex control and
coordination that must be managed by advanced digital technologies. Figure 2 provides a view
of the various applications of smart grid technology within a highly distributed grid system.

Smart Grid System Report 2020 | Page 4

 Department of Energy |January 2022

FIGURE 2. OVERVIEW OF SELECT SMART GRID TECHNOLOGIES ACROSS THE POWER SYSTEM

Source: CLP 9, Power Transmission and Distribution in the Smart Grid

A. Evolution to Digital Sensing and Control

Initial stages of electrification began in the late 19th century in large metropolitan areas
throughout the United States and around the world. In these earliest stages, power generation
occurred at central power stations and served local area customers without the use of a
transmission network. As demand for electricity grew, these local generation-distribution
systems began to become interconnected with the use of transmission lines, substations, and
transformers to step-up or step-down voltage. This overarching electricity grid structure—
centralized generation fed through the transmission system and delivered to customers
through the distribution system—remained static throughout the 20th century and into the
21st century.

Smart Grid System Report 2020 | Page 5

 Department of Energy |January 2022

Despite this relatively static structure,

important changes have been shaping the Review of Federal Legislation Affecting the
evolution of the electric grid. The first Power Grid
generation of field devices developed for 1920: Federal Water Power Act: Created the Federal
monitoring and controlling the grid have Power Commission (FPC), organized in 1930. Amended in
been available for several decades. At the 1935 and renamed the Federal Power Act, expanding the
FPC’s authority to regulate rates for interstate
same time, much of the legacy grid
transmission of power and power sales for resale. In 1977,
equipment has expected lifespans stretching
the DOE Organization Act dissolved the FPC and reassigned
several decades. Through asset renewal and its responsibilities to DOE and to FERC.
proactive upgrade programs, the grid has 1935: Public Utilities Holding Company Act: Gave the
gradually transitioned from one-way Securities and Exchange Commission authority to oversee
communication and analog controls to two- utility antitrust activities.
way data communications encompassing 1967: As a follow-up to the Northeast Blackout of 1965,
the utility industry established the National Electric
intelligent digital devices and advanced Reliability Council to oversee bulk power reliability and
control systems, a transition still underway. security.
As legacy grid equipment reaches end-of- 1978: Public Utility Regulatory Policies Act: Legislated as a
life, modern replacement equipment component of the National Energy Act, promoted energy
typically has computing and smart grid conservation, and encouraged use of domestic energy and
renewable energy generation.
capabilities. An example is how a home 1992: Energy Policy Act: Provided for deregulation of the
thermostat replacement today might come electric power industry setting the stage for restructuring
standard with Bluetooth or Wi-Fi of vertically-integrated investor-owned utilities (IOUs) and
communications, whereas the original unit energy supply competition from independent power
had a mechanical turn-dial. producers.
2005: Energy Policy Act: Major omnibus energy legislation
with provisions on energy security, environmental quality,
and economic growth. FERC’s role was expanded allowing
it to certify an Electric Reliability Organization (ERO) to
oversee reliability of the U.S. bulk power system. FERC
certified the North American Electric Reliability
Corporation (NERC) as the ERO. This act also gave FERC
authority to review and enforce mandatory NERC reliability
standards. The legislation repealed parts of the Public
Utility Regulatory Policies Act and Public Utility Holding
Company Act of 1935 and addresses transmission right-of-
way, renewable fuel standards, tax incentives, energy
efficiency, and domestic energy production.
2007: Energy Independence and Security Act (EISA): Began
the move to enable the United States to have greater
energy independence and security, increase renewable
energy, and promote energy efficiency, and stimulate
energy research, among other purposes.
2009: American Recovery and Reinvestment Act: Spurred
development of the smart grid with over $4 billion in

Smart Grid System Report 2020 | Page 6

 Department of Energy |January 2022

The principal first-generation transmission intelligent devices included protective relays, power
quality monitors, electronic substation meters, and early versions of transformer and
switchgear monitoring equipment. g By the mid-1990s, utilities began to deploy smart digital
equipment onto distribution systems. During this period, smart capability included a sensor to
determine the operational status of a field device and the requisite communications technology
to deliver that status to a central point of control. The information flow was principally one
way: from field to control center.

By the 2000s, utilities began to install more advanced digital devices that permitted two-way
information flow from field devices to the control center—able to sense grid conditions and
receive control signals or take an automated action. These intelligent field devices typically
work in concert with operational applications software that collects system-wide field data on
generation, transmission, or distribution conditions; enables real-time management of utility
operations; and provides status, outage indications, and device coordination information to
field crews and customers.

Table 1 provides a snapshot of how grid hardware, communications/networks, and software

have helped migrate the 20th century electro-mechanical grid into a 21st century digital grid.

TABLE 1. GRID EVOLUTION h

21st Century – Smart Grid

Grid Component Status in 20th Century
Developments Underway
Grid Hardware Well-developed by early 20th century. Controls moving to digital capabilities
Examples: Relays, reclosers, Almost all devices and equipment for measurement, sensing, local
circuit breaker remained electromechanical until intelligence, and distributed control.
1990s.
Grid Use of various limited, one-way analog Communications reaching out to
Communications/Networks communications technologies (e.g., customer premises. Two-way digital
Examples: Field area networks, frame relay circuits) joined in later communications for wide area
wide area networks century with satellite, cellular, networks and field area networks.
unlicensed radio.
Grid Software Limited centralized software for major Distributed software pervasive in field
Examples: GIS, OMS, DMS, EMS applications (e.g., security-constrained devices and systems, Centralized
economic dispatch). software capabilities greatly increased.

Today, electric system planners and engineers select and deploy a collection of smart grid
technologies to meet specific objectives (e.g., reliability, efficiency). Subsequently, the system
planner might add components and systems to meet more advanced operating and planning

g
Protective relays are devices designed to trip a circuit breaker when a grid problem occurs. Examples of
conditions that a relay can detect include over current, over voltage, reverse power flow, under frequency, or over
frequency. Relays can operate very quickly, within 1–2 electrical cycles (16–32 milliseconds).
h
Grid software examples include geographic information systems (GIS), outage management systems (OMS),
distribution management systems (DMS), energy management system (EMS).

Smart Grid System Report 2020 | Page 7

 Department of Energy |January 2022

needs. These later smart grid deployments carry a larger integration aspect, connecting existing
and newer technologies into a system. Deployed grid technologies continue to evolve over
time, often through software or firmware revisions that add functionality to existing devices
and hardware or through additional system integrations. Ultimately, a system of systems is
emerging to form an integrated and coordinated grid planning and operations platform.

For example, Figure 3 depicts the evolution of technology used to manage voltage on a
distribution feeder. Once set manually, the operation of grid components consisting of
transformer load-tap changers, regulators, and capacitors can now be adjusted in an integrated
way with the application of sensing, communication, and control technology. Integrated
volt/VAR optimization (IVVO) permits fine adjustments as needed throughout the day to
maintain voltage within acceptable limits and can target specific operating objectives such as
reduced losses or conservation voltage reduction.i As more DERs j connect to distribution
systems, IVVO technology will need to be integrated with the operation of smart inverters and
other power electronics devices to fully manage circuits exhibiting swings in voltage levels.

i
Conservation voltage reduction (CVR) is the intentional operation of distribution system circuits to provide
customer voltages in the lower end of the acceptable range, with the goal of achieving energy and demand
reductions for customers.
j
DERs are resources sited close to customers that can provide all or some of their electric power needs or can be
used by the system to either reduce demand (such as energy efficiency) or provide supply to satisfy the energy,
capacity, or ancillary service needs of the grid. The resources are small in scale, connected to the distribution
system, and close to load. Examples of different DER types include solar photovoltaic (PV), wind, combined heat
and power (CHP), energy storage, demand response (DR), electric vehicles (EVs), microgrids, and energy efficiency
(EE).

Smart Grid System Report 2020 | Page 8

 Department of Energy |January 2022

FIGURE 3. AN EXAMPLE OF EVOLUTION OF INTEGRATED VOLT/VAR OPTIMIZATION

IVVO represents one of many systems utilities operate. Such standalone applications or systems
are becoming common today, but operators are increasingly turning to integrating disparate
systems to manage the complexities of a data-rich and multi-objective grid. A prime example of
an integrated system, or system of systems, is an advanced distribution management system
(ADMS). ADMS deployments often incorporate and integrate other crucial systems such as
outage management systems (OMS) and distribution supervisory control and data acquisition
(SCADA) to provide monitoring and control functions and to unify the distribution operations
user interface. An ADMS also must be integrated with other systems, however, such as a
geographic information system (GIS) to create and maintain an accurate network model.
Figure 4 shows the system architecture for a typical ADMS implementation.

Smart Grid System Report 2020 | Page 9

 Department of Energy |January 2022

FIGURE 4. INTEGRATION OF SYSTEMS INVOLVED IN AN ADMS IMPLEMENTATION 10

Source: Schneider Electric, How the Convergence of IT and OT Enables Smart Grid Deployment

As the benefits of systems integration materialize, considering core system components and
treating them as a supporting layer or platform for a variety of applications that can be added
over time, as shown in Figure 5, becomes essential. Therefore, rather than developing siloed
systems—each consisting of field devices, sensors, communications, and control systems—
deploying a sensing, communication, and computing layer that can serve all the applications
might be useful, resulting in improved efficiency and effectiveness of integrating grid systems.
In Figure 5, the physical grid, communication networks, sensing and control functions, and
data/information management systems are treated as core platform components supporting
applications such as DER management, customer and market interactions, volt/VAR
management, and advanced utility analytics. The platform concept is also important when one
begins to consider the convergence of the electric grid with other infrastructures, as could
happen in a city where the physical grid—as well as sensing, communication, and control
functions—might be shared with other systems, such as building and transportation systems
and emergency operations.

Smart Grid System Report 2020 | Page 10

 Department of Energy |January 2022

FIGURE 5. THE CYBER-PHYSICAL PLATFORM 11

Source: DOE, Modern Distribution Grid (DSPx), Decision Guide Volume III

Smart Grid System Report 2020 | Page 11

 Department of Energy |January 2022

Section Endnotes

1
American Public Power Association, America’s Electricity Generation Capacity 2020 Update, March 2020,
https://www.publicpower.org/system/files/documents/Americas-Electricity-Generation-Capacity-2020.pdf.
2
United States Census Bureau, U.S. and World Population Clock, September 10, 2020.
https://www.census.gov/popclock/.
3
Marston, Theodore U., The US Power System Infrastructure and Its Vulnerabilities, National Academy of
Engineering, June 15, 2018, https://www.nae.edu/183133/The-US-Electric-Power-System-Infrastructure-and-Its-
Vulnerabilities#:~:text=The%20US%20electricity%20supply%20system%20has%20more%20than%20600%2C000%
20circuit,%3E230%20kilovolts%2C%20kV).
4
U.S. Energy Information Administration, 2019 Annual Electric Power Industry Report, Form EIA-861, Balancing
Authority, July 30, 2020, https://www.eia.gov/electricity/data/eia861/.
5
FERC, RTOs, and ISOs, https://www.ferc.gov/industries-data/electric/power-sales-and-markets/rtos-and-isos.
6
U.S. DOE, Office of Enterprise Assessments, Power Marketing Administrations,
https://www.energy.gov/ea/power-marketing-administrations.
7
U.S. Energy Information Administration, 2019 Annual Electric Power Industry Report, Form EIA-861, Sales to
Ultimate Customers, July 30, 2020. https://www.eia.gov/electricity/data/eia861/.
8
Alexandra von Meier, University of California, Berkeley, Integration of renewable generation in California:
Coordination challenges in time and space, October 2011,
https://www.researchgate.net/publication/228854029_Integration_of_renewable_generation_in_California_Coor
dination_challenges_in_time_and_space.
9
CLP, Power Transmission and Distribution in the Smart Grid, https://www.clp.com.hk/ en/about-clp/power-
transmission-and-distribution/smart-grid.
10
Schneider Electric, How the Convergence of IT and OT Enables Smart Grid Deployment,
http://cdn.iotwf.com/resources/10/How-the-Convergence-of-IT-and-OT-Enables-Smart-Grid-
Development_2013.pdf.
11
Modern Distribution Grid, Decision Guide, Volume III, developed for the Office of Electricity, US Department of
Energy, PNNL, June 28, 2017, https://gridarchitecture.pnnl.gov/media/Modern-Distribution-Grid-Volume-III.pdf.

Smart Grid System Report 2020 | Page 12

 Department of Energy |January 2022

III. Factors Shaping Smart Grid Deployments

The electric grid has experienced technological and institutional evolution throughout its
history. Currently, however, we are facing a dramatic structural transformation. Five tightly
interconnected forces are collectively driving grid transformation, imposing requirements for
advanced functional capabilities, and ultimately shaping how utilities and regulators determine
the ways to apply smart grid technology. The five forces are:

• The advancement of technology in three important areas: a) smart grid applications

related to improving utility operational capabilities; b) progress made in the
advancement of renewable and distributed energy resource technologies and their use
by utilities, customers, and third-party merchants k; and c) the electrification of
consumer products, such as electric vehicles and heat pumps.
• Federal, state, and local policies, including the design of markets, that encourage the
use of renewable and distributed energy resources and foster energy management
options for customers.
• The emergence of new participants, such as utility customers, energy services
companies, and technology merchants, in the management and generation of electricity
and as providers of grid services.
• The convergence of the electric grid with other systems, such as the natural gas,
transportation, and building infrastructures.
• Increasing concerns regarding the security and resilience of the electric grid that require
implementing preventive and mitigative strategies, including considerations of
alternative grid configurations (e.g., microgrids), to address cyber and physical threats.

A. Technology Availability
Technology is at the heart of enabling the smart grid. The availability of new smart grid
technologies has increased in recent years in the United States, spanning from distribution
automation devices and components to advanced computing and control systems. These
technologies provide numerous benefits to utilities enabling them to enhance current practices
and establish new capabilities, as needed, to improve grid reliability and to support the
integration and utilization of distributed energy resources (DERs). Table 2 provides a look at the
devices and systems applied to the automation of distribution utility operations.

k
This group consists of commercial firms that provide technology and services to utility customers, DER
aggregators, and firms that own resources that provide electricity to utilities or customers.

Smart Grid System Report 2020 | Page 13

 Department of Energy |January 2022

TABLE 2. DEVICES AND SYSTEMS THAT SUPPORT DISTRIBUTION AUTOMATION APPLICATIONS 1

DA Applications
Reliability Voltage and Equipment
DA Technologies and Systems and Outage Reactive Power Health DER
Management Management Condition Integration
(FLISR) l (VVO) m Monitoring
Remote Fault Indicators ✓ ✓
Smart Relays ✓
Automated Feeder Switches (or
✓ ✓
Reclosers)
Devices

Automated Capacitors ✓ ✓
Automated Voltage Regulators ✓ ✓
Automated Feeder Monitors ✓ ✓ ✓ ✓
Transformer Monitors ✓
Communications and Backhaul
✓ ✓ ✓ ✓
Systems
Supervisory Control and Data
✓ ✓
Acquisition Systems
Systems Integration

Distribution Management
System/Advanced Distribution ✓ ✓ ✓ ✓
Management System
Integration with Advanced Metering
✓ ✓ ✓ ✓
Infrastructure/Smart Meters
Outage Management Systems,
Geographic Information System,
✓
Customer Information System,
Workforce Management Integration
Source: DOE, Distribution Automation Smart Grid Investment Grant Program Report

l
Fault location isolation and service restoration (FLISR) applications can utilize decentralized, substation, or control
center intelligence to locate, isolate, reconfigure, and restore power to healthy sections of a circuit.
m
Volt/VAR optimization (VVO) is a process of optimally managing voltage levels and reactive power to achieve
more efficient gird operation by reducing system losses, peak demand or energy consumption or a combination of
the three.

Smart Grid System Report 2020 | Page 14

 Department of Energy |January 2022

In addition, renewable energy technologies (e.g., solar and wind) and a variety of energy-
producing or load-modifying technologies applied within distribution systems, also referred to
as DERs, are becoming more widely used due to favorable prices, policy incentives, and the
growth of a service industry. These devices are available to utilities, customers, and third
parties. Where they are being adopted a shift toward a more distributed electric grid is
occurring, and services, such as voltage and frequency support, back-up power, and demand
response, are being provided to a greater extent by the distributed resources. DERs remain a
small portion of the overall U.S. energy supply—at less than half a percent in 2018—although in
some states, such as Hawaii and California, DERs are becoming a significant percentage of the
overall generating capacity. Figure 6 shows DER capacity as a percentage of the total U.S.
generating capacity and as a percentage of state generating capacities for a few states
experiencing higher DER adoption (California, Hawaii, North Carolina). n

FIGURE 6. DER CAPACITY AS PERCENTAGE OF TOTAL GENERATING CAPACITY

Source: U.S. Energy Information Administration 2019 State Electricity Profiles

Figure 7 shows the trend in the adoption of solar photovoltaic (PV) technology, which is now
increasingly being paired with energy storage technology to smooth out the variability in power
supplied by PV systems. Market estimates show total solar capacity additions (i.e., utility and
nonutility) reaching 18 gigawatts (GW) in 2020, and at an average estimated cost of about
$1.23/Watt DC o translates to a market value of nearly $23 billion.2

n
Although driven by growth in solar photovoltaic (PV), the DERs presented in Figure 6 also includes wind,
hydroelectric, fuel cells, internal combustion, gas turbines, steam, and other technologies.
o
WattDC denotes the active power rating of the direct current (DC) side of a solar PV installation, prior to power
conversion to alternating current (AC) performed by an inverter.

Smart Grid System Report 2020 | Page 15

 Department of Energy |January 2022

Given projections for continued strong growth despite the possible loss of the investment tax
credit in late 2021 and other headwinds, the need for smart grid technologies to gain greater
operational visibility into and control of these variable resources will be increasingly
emphasized to ensure their operation is compatible with system safety and reliability.

FIGURE 7. U.S. PV INSTALLATION FORECAST, 2010–2025

Source: Wood Mackenzie, U.S. Solar Market Insight, Executive Summary, Q2 2020

The Energy Storage Association and Wood Mackenzie anticipate that by 2025 the U.S. energy
storage market will grow to $7.6 billion, which is more than a four-fold increase from 2020
levels. 3 EIA predicts total deployments will exceed 4.5 GW by 2023 (see Figure 8 below).
Whereas energy storage can be a grid asset for increased flexibility to manage a more dynamic
grid, the need for smart grid investments to integrate these resources effectively will also grow.

Smart Grid System Report 2020 | Page 16

 Department of Energy |January 2022

FIGURE 8. U.S. LARGE-SCALE ENERGY STORAGE ANNUAL DEPLOYMENTS

Source: U.S. Energy Information Administration, Battery Storage in the United States: An Update on Market Trends,
July 2020

DERs provide electric utility customers with a variety of potential benefits, including energy
savings and improved resilience. The introduction of renewable energy technology and DERs,
however, has introduced a greater and less predictable degree of variability in both electricity
supply and demand (load), requiring finer levels of control and coordination between utilities
and their customers.

To illustrate this point, Figure 9 shows the combined effect of rooftop solar and energy storage
for a generic residential home in Austin, Texas. p The blue shaded area shows the customer’s
load without the use of either technology; the orange shaded area shows the net customer load
due to the application of the DER technologies. The rooftop solar system charges the battery
during the day and discharges it during the evening to lower the customer’s peak load. As
customers begin to adopt these technologies, utilities will need to manage not only the
instantaneous variability in net load, but also the amount of electricity the rooftop system
might provide back to the utility, especially as weather (e.g., moving clouds) might suddenly
affect the amount of solar energy provided. Establishing the appropriate incentives and tariff
structures (e.g., time-varying rates or net-energy-metering policies) to achieve the preferred
balance between customer behaviors (in purchasing and operating their devices) and utility
operations remains a significant challenge.

p
The analysis was conducted by Lawrence Berkeley National Laboratory using the DER-CAM model on actual
residential load profiles.

Smart Grid System Report 2020 | Page 17

 Department of Energy |January 2022

FIGURE 9. RESIDENTIAL SOLAR AND ENERGY STORAGE OPERATION DURING A SUMMER WEEKDAY

Source: Lawrence Berkley National Laboratory, DER-CAM Analysis

B. Federal and State Policies

The advancement of technology combined with the stimulatory effects of federal and state
policies has greatly influenced the rate of smart grid deployment. Table 3 shows the status of
state policies driving the uptake of renewables and DERs, as well as activity associated with
initiatives associated with integrated distribution system planning and grid modernization. q
Integrating and fully using DERs requires the application of grid modernization techniques so
they can be connected to the grid without compromising grid operations and used in a way that
optimizes their value.

q
Although “grid modernization” has no strict definition, it is generally understood to mean the application of
digital sensing, communication, control, computing, and data and information management systems.

Smart Grid System Report 2020 | Page 18

 Department of Energy |January 2022

TABLE 3. SUMMARY OF STATE-LEVEL REGULATORY AND POLICY ACTIONS 4

State Solar PV Energy Storage Microgrids Electric Vehicles Int. Dist. Planning Grid Mod
AL ○ ○ ○ ○ ○ ○
AK ● ◒ ○ ○ ○ ◒
AZ ● ● ○ ● ● ●
AR ● ◒ ○ ◒ ● ●
CA ● ● ● ● ● ●
CO ● ● ○ ● ● ◒
CT ● ◒ ○ ◒ ● ●
DC ● ◒ ● ◒ ● ●
DE ● ◒ ○ ◒ ● ○
FL ● ◒ ○ ○ ○ ◒
GA ● ◒ ○ ○ ○ ◒
HI ● ◒ ● ◒ ● ●
ID ○ ◒ ○ ○ ○ ○
IL ● ◒ ◒ ◒ ● ●
IN ● ◒ ○ ○ ● ●
IA ● ○ ○ ● ○ ◒
KS ● ◒ ○ ○ ○ ●
KY ● ○ ○ ○ ○ ●
LA ● ◒ ○ ◒ ● ●
ME ● ◒ ◒ ◒ ● ◒
MD ● ◒ ● ◒ ● ◒
MA ● ● ● ● ● ●
MI ● ◒ ● ◒ ● ●
MN ● ◒ ◒ ● ● ●
MS ● ◒ ○ ○ ○ ◒
MO ● ◒ ○ ● ● ●
MT ● ○ ○ ○ ○ ◒
NE ● ◒ ○ ○ ○ ○
NV ● ● ○ ◒ ● ◒
NH ● ◒ ◒ ◒ ● ●
NJ ● ● ◒ ◒ ● ◒
NM ● ◒ ○ ● ◒ ○
NY ● ● ● ● ● ●
NC ● ◒ ○ ◒ ● ●
ND ● ○ ○ ○ ○ ○
OH ● ◒ ○ ◒ ● ●
OK ● ○ ○ ○ ○ ◒
OR ● ● ● ● ● ●
PA ● ◒ ○ ◒ ○ ●
RI ● ● ○ ◒ ● ●
SC ● ◒ ○ ◒ ● ◒
SD ○ ○ ○ ◒ ○ ○
TN ○ ○ ○ ○ ○ ◒
TX ○ ◒ ○ ◒ ◒ ●
UT ● ◒ ○ ◒ ○ ○
VT ● ◒ ○ ◒ ◒ ◒
VA ● ◒ ○ ◒ ● ●
WA ● ◒ ○ ● ● ◒
WV ● ○ ○ ○ ○ ◒
WI ● ◒ ○ ◒ ◒ ◒
WY ◒ ○ ○ ○ ○ ○
KEY ● Comprehensive policy & actions ◒ Some level of policy & action ○ No policy or action

Smart Grid System Report 2020 | Page 19

 Department of Energy |January 2022

Numerous state and federal policies incentivize the use of DERs. In addition to the policy
actions shown in Table 3, for example, 38 states and the District of Columbia have active
renewable portfolio standards (RPS) to mandate greater adoption and integration of renewable
power generation.5 Massachusetts, for example, has adopted an RPS variant—called the clean
peak energy standard—which codifies requirements to have growing levels of less carbon-
intensive generation resources operating at the time of peak demand to achieve carbon
reductions.6

Although many states historically have relied on net energy metering (NEM) to compensate
DERs for excess generation, many are actively exploring or have already adopted alternatives to
NEM 7 that provide price signals that more effectively align compensation with the value DERs
provide. In just the fourth quarter of 2019, 37 states and the District of Columbia took actions
focused on distributed generation compensation.8 For example, some states are exploring
time-varying rates that incentivize DERs to operate in ways and at times that best provide
system value,9 compensation mechanisms for hybrid storage and PV resources, and tariffs for
microgrids under a range of ownership models.10

Beyond rate designs, some utilities are also evaluating the ability for DER solutions to provide
system value by participating in utility programs (e.g., energy efficiency and demand response)
and procurements (e.g., “non-wires alternatives” r). These efforts are creating new markets for
DERs within distribution systems. As of mid-2019, 19 states and the District of Columbia had
either adopted or were actively exploring adoption of performance-based ratemaking (PBR)
structures to incentivize utilities to use resources beyond traditional generation to meet
capacity needs and achieve high rates of reliability. 11 The North Carolina Clean Energy
Technology Center, which reviews grid modernization progress in each of the 50 states,
reported that as many as 38 states have taken some action related to grid modernization in Q1
of 2020.12

In addition to state policies, recent actions by the Federal Energy Regulatory Commission (FERC)
have focused on the increasing potential of energy storage and aggregated DERs to participate
in wholesale markets for energy and ancillary services, thus competing with resources at the
bulk power system level. In 2018, FERC issued Order 841 and mandated that all independent
system operators and regional transmission organizations (ISOs/RTOs) develop a participation
model allowing energy storage resources to participate in wholesale markets and provide all
services they are technically capable of delivering. 13 On September 17, 2020, FERC issued
Order 2222, which requires each ISO/RTO to develop rules allowing for the participation of DER
aggregations in wholesale markets.14

Although these orders offer opportunities to capture additional value from energy storage and
DER aggregations, they also present operational challenges that will require deploying
additional sensing and control technologies.

r
Non-wires alternatives (NWAs) use distributed energy resources and microgrids to defer or replace the
installation of more traditional “wires and poles” infrastructure.

Smart Grid System Report 2020 | Page 20

 Department of Energy |January 2022

ISOs/RTOs have no real-time visibility into distribution system conditions (nor typically do
distribution utilities have sufficient observability into behind-the-meter resources). Therefore,
ongoing operational coordination is needed among ISOs/RTOs, distribution utilities, DER
aggregators, and the owners of participating DERs (e.g., energy storage) to ensure the
operation of participating DERs to meet a wholesale market obligation is compatible with
distribution system conditions (e.g., voltage and thermal limits). 15 Although the California
Independent System Operator (CAISO) 16 has already implemented a DER aggregation model
and the New York Independent System Operator (NYISO) 17 is in the process of doing so, their
experience to date with facilitating such operational coordination has been limited to pilots.s, 18
As the number of DERs—directly or through an aggregator—participating in wholesale markets
increases, ISOs/RTOs, distribution utilities, and the owners or aggregators of DERs will need to
develop processes and technological solutions that can effectively coordinate the interactions
of these entities across all timescales.

1. STATE PLANNING ACTIVITIES

Integrated planning processes that consider grid modernization implementation and include
the integration and utilization of DERs, as well as the novel grid configurations (e.g., microgrids)
that apply them, are evolving. Five states have mandated that utilities submit an integrated
distribution plan (IDP), and 21 states have active regulatory proceedings underway to
eventually require them, as depicted in Figure 10.19 IDPs addressing high levels of DER adoption
require strategies for effectively accommodating DERs to maintain adequate system conditions,
and they need approaches for monitoring and control. IDPs also have highlighted the use of
non-wires alternatives (NWA)—typically a combination of smart grid technologies and DERs—as
a new type of solution to meet specific grid objectives while deferring or avoiding an
investment in traditional utility infrastructure. New York and California are leading NWA
deployments with many projects deployed in each state, while 10 other states have each
implemented a handful of NWA projects. 20

s
Even though the CAISO’s Distributed Energy Resource Participation (DERP) model is already implemented, no
participation to date has occurred, largely due to the requirements that DERP aggregations must participate in
wholesale markets at all times, the time and cost associated with the interconnection process, and that these
aggregations do not currently qualify to provide resource adequacy.

Smart Grid System Report 2020 | Page 21

 Department of Energy |January 2022

FIGURE 10. INTEGRATED DISTRIBUTION PLANNING STATE ACTIVITIES 21

Source: ICF, with updates from LBNL, PUC Distribution Planning Practices, Distribution Systems Planning and
Training for Southeast Region, March 11–12, 2020

In addition, 38 states and the District of Columbia have completed or are undertaking some
form of grid modernization activity. Some of these efforts were considered by regulatory
commissions, on a statewide basis, while others were initiated by individual utilities. Although
IDPs and grid modernization plans are beginning to converge, utilities often propose grid
modernization investments in standalone regulatory proceedings. 22 Smart grid technologies
comprise a large portion of typical grid modernization investments.

Figure 11 shows the status of regulatory and legislative activities for grid modernization in each
state. Technology and approaches covered in grid modernization efforts in Q1 of 2020 include:

• Advanced metering infrastructure (AMI) regulatory proceedings or bills under

consideration in 12 states.

• Energy storage proceedings and bills under consideration in 20 states. (The three major
investor-owned utilities (IOUs) in California filed their 2020 energy storage procurement
plans for a total of 1,325 MW of capacity.)

• Microgrid proceedings and bills under consideration in seven states. (A microgrid

project was approved as part of Dominion Energy’s Grid Transformation plan.)

• General smart grid proceedings and bills under consideration in 16 states. [The
Pennsylvania Public Utility Commission approved plans from four utilities that include
substantial investment in advanced distribution management system (ADMS),
supervisory control and data acquisition (SCADA), and distribution automation.]

Smart Grid System Report 2020 | Page 22

 Department of Energy |January 2022

FIGURE 11. GRID MODERNIZATION STATE ACTIVITIES

Image sources: NCCETC, 50 States of Grid Modernization Q1 2020 Quarterly Report, April 2020 and Gridwise
Alliance, Grid Modernization Index 2018: Key Indicators for a Changing Electric Grid

Application of an integrated resource planning process predates the establishment of

integrated distribution system planning and grid modernization planning. Although historically
an integrated resource plan (IRP) has relied on the procurement of bulk power system t supply
resources to meet customer load, more recently the need to account for distribution-level
resources has been increasingly emphasized, given the ability for DERs (and demand-side
management, or DSM, more broadly) to deliver energy supply and reliability needs. Beginning
in November 2018, the National Association of Public Utility Commissioners (NARUC) and the
National Association of State Energy Officials (NASEO) with funding support from DOE initiated
the Comprehensive Energy Planning Task Force with 16 states. The task force is examining how
to better align forecasting assumptions and investment decisions associated with the typically
disparate integrated resource planning, integrated distribution planning, and transmission
planning processes.23 Hawaii is the only state that has fully integrated their planning at both the
transmission and distribution system levels,24 and Puerto Rico is contemplating a similar
integration.

t
The bulk-power system is a large interconnected electrical system made up of generation facilities and assets
used to transmit and control the flow of power. The bulk-power system does not include facilities used in the local
distribution of electric energy. In the United States, the reliability of the bulk-power system is overseen by the
FERC-designated electric reliability organization, currently the North American Electric Reliability Corporation
(NERC).

Smart Grid System Report 2020 | Page 23

 Department of Energy |January 2022

C. New Participants and Evolving Business Models

As a result of the technological advancements and favorable policies mentioned above,
opportunities to provide grid servicesu by electric utility customers (residential, commercial,
and industrial customers) and third-party merchants continue to evolve and expand. These grid
services include providing electricity back to the grid and ancillary services, such as providing
voltage, frequency, and back-up support. In addition, regulators continue to be interested in
reducing the need to build greater electricity delivery capacity (e.g., power lines and
substations) by applying services provided by local DER owners and customer energy efficiency
and demand-side management where economically feasible. The term non-wires alternative is
applied to the application of DERs to meet local energy and demand needs.

For example, Bonneville Power Administration avoided a proposed 80-mile, 500-kilovolt (kV)
transmission line that would cost over $1 billion by acquiring 45 MW of demand response and
355 MW of generation redispatch. 25 In general, where favorable economics and programs exist,
there is greater participation by nonutility entities (e.g., utility customers and third parties) in
managing and even generating electricity. This has led many to consider the grid as a utility
platform to enable the plug-and-play of devices and transactional activity (e.g., the sharing of
electricity and other services) envisioned with high levels of DER participation from customers
and third-party merchants. Incorporating high levels of DERs onto the grid, however, is not
straightforward and requires the deployment of smart grid technology and close coordination
among DER operators and grid operators. Legislators and regulators typically are not aware of
the level of sophistication and the potential for redundancy needed to effectively integrate and
use DERs.

An evolving phenomenon is the growing deployment of microgrids v that will require

sophisticated control schemes. As shown in Table 4, several states, communities, and utilities
are actively pursuing the use of microgrids as a tool to address resilience needs, and are
beginning to recognize the value of microgrids for integrating additional clean energy resources
onto the grid to achieve carbon and emission reduction targets.w As shown in Table 5, several
types of unique microgrid configurations exist in relation to electrical boundaries, stakeholders,
ownership, operational models, and compensation methods.

u
Table 12 in Appendix VII.A shows common types of grid services.
v
A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical
boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and
disconnect from the grid to enable it to operate in grid-connected or island.
w
Community choice aggregators, detailed in Appendix VII.B, allow local governments to procure energy supply
services and DERs for eligible energy customers in the community, often to meet carbon and emission targets.

Smart Grid System Report 2020 | Page 24

 Department of Energy |January 2022

TABLE 4. LEGISLATIVE AND REGULATORY SUPPORT FOR MICROGRIDS

Community Interest – Community-based microgrid projects will often require funding from a local community
and participating customers to cover incremental costs above regular electric service and to align cost allocation
with anticipated benefits without increasing utility rates.
California: S.B. 1215 26 was introduced in February 2020 with the intention to create a Local Government De-
Energization Event Resiliency Program to provide grant funding to local governments, joint power authorities
and special districts to deploy resiliency projects such as microgrids. In June 2020, the California Public Utilities
Commission (CPUC) approved Pacific Gas & Electric Company’s (PG&E) Community Microgrid Enablement
Program 27 that will provide incentives in the form of credits to offset the distribution upgrades to enable
community-based multi-user microgrids.
Massachusetts: The Massachusetts House passed H.B. 3997 28 in July 2019, establishing an allocation of funds to
provide technical assistance for municipalities developing microgrids. It also creates a Green Resiliency Fund for
local governments to make resiliency investments. Massachusetts legislatures also proposed H.B. 2831 29 and S.B.
1941, which makes commercial Property Assessed Clean Energy (PACE) financing available for microgrids that
incorporate clean energy resources.
New Jersey: A.B. 2374 and S.B. 1953 were proposed 30 on January 27, 2020 to make microgrids eligible for PACE
financing.
New York: A.B. 2452 and S.B. 1535 were proposed on January 22, 2019 to create the Take charge New York
Power program to award funding to qualified businesses for microgrid projects.
Oregon: The Oregon Legislature passed S.B. 1537, 31 which is directing focus and attention toward how
microgrids can provide emergency response and preparedness. Additionally, the Oregon Department of Energy
is investigating resilience threats and how microgrids fit into the consideration of solutions in the “Oregon
Guidebook for Local Energy Resilience,” 32 published in 2019. The Oregon Legislature also passed H.B. 2193, 33
which directed the utilities to find potential projects and ultimately procure an energy storage system. After
gauging customer interest and engaging in a rigorous selection process with local governments, Portland General
Electric partnered with the City of Beaverton to jointly invest in a microgrid at the Beaverton Public Safety Center
for police and emergency management.
Purview of State Regulatory Commission & Definition of Utility – Issues arise during island mode, when
resources are no longer able to participate in markets or provide grid services under utility programs and tariffs
accessible during grid-connected operating modes, and bilateral contracts might be needed between the
microgrid owner and participating customers.
District of Columbia: On May 31, 2019, the D.C. Public Service Commission (DCPSC) Modernizing the Energy
Delivery System for Increased Sustainability (MEDSIS) Stakeholder Working Groups released a final report of
recommendations 34 addressing microgrid development. One recommendation was for the DCPSC to establish a
new regulated entity of “microgrid operator” for any entity that operates a microgrid serving multiple
customers. Stakeholder positions vary on this issue and range from heavy to light regulatory oversight on topics
such as consumer protections, quality of service, and emissions requirements.
California: Electric Rules 24 (for PG&E and Southern California Edison (SCE)) and 32 (for San Diego Gas and
Electric (SDG&E)) are a set of rules that define the roles and responsibilities of third-party demand response
providers and DER aggregators, an important consideration for determining regulatory rules that apply to
microgrid operators who are also operating as DER aggregators. Applying such existing rules to multi-user
microgrid operators might be reasonable, as they are effectively performing similar functions as DER Aggregators
under blue-skies.
Maine: The Maine Legislature took steps toward clarity by approving L.D. 13 in March 2020, which declared that
microgrid operators would not be deemed public utilities under Maine statute and thus would not be held to the
same regulatory scrutiny of utilities by the Maine Public Utilities Commission (MPUC).

Smart Grid System Report 2020 | Page 25

 Department of Energy |January 2022

New York: In New York, several microgrid developers have petitioned the New York Public Service Commission
(NYPSC) against being subject to the Commission’s jurisdiction, including most recently in April 2019. Despite
several petitions, a precedent ruling has yet to be made on whether multi-user microgrids are or are not subject
to the Commission’s jurisdiction. In January 2020, however, the New York Legislature proposed A.B. 6429—a bill
that would require the NYPSC to develop recommendations regarding the establishment of microgrids.
Cross Subsidization & Monetization of Societal Benefits – A challenge for microgrid developers and utilities
investing in these projects is how to effectively demonstrate and quantify the societal benefits beyond those for
the microgrid participants.
California: In 2018, California S.B. 1339 directed the CPUC to take several actions surrounding the
commercialization of microgrids without shifting costs between ratepayers, prohibiting cross-subsidization of
microgrid deployment.
Hawaii: In 2018, Hawaii H.B. 2110 35 directed the Hawaii Public Utilities Commission to open a proceeding to
establish a microgrid services tariff, citing the importance of avoiding weakening the overall system and
increasing costs for other utility customers. Hawaiian Electric’s (HECO) draft microgrid services tariff, filed on
March 30, 2020, states that the onus to make the case for societal and resiliency benefits for monetization falls
on the microgrid operator, consistent with the Hawaii commission’s microgrid order.
Maryland: The Maryland Public Service Commission was presented with two multi-customer microgrid proposals
—one from Pepco 36 and the other from Baltimore Gas & Electric 37—and rejected both on the grounds of
unequal distribution of benefits to ratepayers and the inability to quantify resilience benefits.
Maine: The approved legislation in Maine, L.D. 13, also directed the MPUC to approve microgrid proposals of up
to 25 MW if they are in the public interest, which might provide more direction in Maine as it relates to rate
recovery for microgrids that act in the public’s best interest. L.D. 13 also gives the Maine Public Utilities
Commission (MPUC) leeway in evaluating rate payer impacts of microgrid proposals.
Michigan: On April 29, 2019, the Michigan House of Representatives proposed legislation, H.B. 4477, 38 which will
require the Michigan Public Service Commission to prepare a report evaluating the costs and benefits of using
microgrids to supply electricity to critical facilities.

TABLE 5. MICROGRID ARCHETYPES 39

Archetype Description
Customer Microgrid An independently developed microgrid with distributed energy-producing resources and
loads wholly within a single customer’s site (single facility or campus, including any
tenants).
Multiuser/Community An independently developed microgrid using a utility distribution grid to link distributed
Microgrid energy-producing resources with multiple specific customer loads or a community.
Utility Microgrid Utility microgrids have focused on multiuser/community-scale projects. These are
distinguished by the utility taking the lead to independently develop or work in
partnership with resource providers.
Remote Microgrid A resilient power system for a facility/campus that is not grid connected (off grid). This is
an effective solution for specific applications but is not within the scope of grid-
connected microgrids sought by state policies for community resilience.
Virtual Power Plant A VPP is not typically considered a microgrid. VPPs will coordinate resources to provide
(VPP) grid services, however, and thus they present the same control and ownership issues as
true microgrids.

Smart Grid System Report 2020 | Page 26

 Department of Energy |January 2022

Although customer and remote microgrids are fairly common, multi-user, community
microgrids, schematically depicted in Figure 12, are in a very early stage of development and
face both technological and institutional challenges.

A minigrid is a type of community microgrid that encompasses a large geographic area to

provide resilience for its customers and likely would be controlled by a minigrid operator. The
application of minigrids is currently being explored in Puerto Rico as a way to improve resilience
on the island. 40

FIGURE 12. COMMUNITY MICROGRID CONFIGURATION 41

Source: P. De Martini, J. Leader, B. Blair, and H. Cutler, How to Design Multi-User Microgrid Tariffs

In general, microgrids are electrically connected with the larger grid during normal, blue-sky
conditions and separate or island when the larger grid cannot provide sufficient power. In both
cases, energy-producing resources are required (whether provided from the grid, the microgrid,
or both systems) to serve customers’ load and maintain frequency and voltage within service
conditions. Sophisticated protection and control capabilities are needed to maintain operations
while seamlessly balancing electrical service needs on both sides of the point of common
coupling between the larger grid and microgrid. Deployments of multi-user, community
microgrids in particular face institutional issues currently being addressed by several states:

• Blue-sky revenues are insufficient to cover their costs; the societal and individual
customer benefits (primarily improved resilience) require government funding to avoid
increased rate pressure from nonparticipating customers.
• Rules governing consumer protection and electricity quality of service are often outside
the purview of a commission and require further definition.
• Challenges in formulating tariffs that can address issues related to a) the cross-
subsidization of microgrid development by other non-benefiting customers and b) the
monetization of potential operational and societal resilience benefits that appropriately
compensate the utility and microgrid owner.

Smart Grid System Report 2020 | Page 27

 Department of Energy |January 2022

D. Convergence
Convergence is the transformation of two or more networks or systems to share resources and
interact synergistically via a common and seamless architecture, thus enabling new value
streams and facilitating operational benefits. The convergence of the electric grid with other
infrastructures (e.g., building and transportation systems) suggests the application of a
common architecture, tools, and operational methods to maximize value stream opportunities
and reduce operational difficulties across these domains.42 Figure 13 conceptually illustrates
various scenarios of network and convergent value over time. If two networks are
complementary but do not provide synergistic benefits, the resulting value is the sum of the
two networks, as represented by the aqua color curve Net 1 + Net 2. If the potential for synergy
exists, however (e.g., electric vehicles or buildings interacting with the electric grid where
benefits can flow in both directions), additional value to owners and operators of these three
systems can be realized. The “smart grid” results from the integration of the cyber system and
the physical grid; convergence then implies full interaction of the electric grid with other
systems (e.g., transportation, building, water, petroleum, natural gas).

FIGURE 13. SCENARIOS OF NETWORK AND CONVERGENT VALUE 43

Source: P. De Martini, J. Taft, Value Creation through Integrated Networks and Convergence

Urban environments provide opportunities to converge the electric grid effectively with other
systems. An example is Pecan Street x in Austin, Texas, where continual innovation in a host of
community-based technologies (e.g., building control systems, electric vehicles, photovoltaic

x
For more information: https://www.pecanstreet.org/.

Smart Grid System Report 2020 | Page 28

 Department of Energy |January 2022

systems, energy storage, and water usage monitoring) is being tested and advanced through a
project that integrates hundreds of homes with electric grid operation.

In another example, the City of Chattanooga in Tennessee has installed high-speed fiberoptic
cable to serve its electric grid operations and the community, where it is helping provide
advanced STEM y instruction to its classrooms; the cable also is spurring economic development
by offering high-speed internet to firms relying on low-latency, high throughput digital
information. Figure 14 shows the potential evolution of the electric grid with additional
infrastructures; also of interest is convergence with water and other energy systems.

FIGURE 14. EVOLUTION OF SEVERAL CONVERGENCES WITH THE ELECTRIC GRID 44

Source: P. De Martini, J. Taft, Value Creation through Integrated Networks and Convergence

E. Resilience
The primary requirement of electric grid planners and operators is to ensure the safety and
reliability of the electric grid so that disruptions in electrical service to consumers are
minimized. Well-established metrics and procedures for maintaining grid reliability are in place
to address anticipated disturbances (e.g., faults occurring due to aging or damage to utility
infrastructure) under normal, blue-sky conditions. An increasing concern exists, however,
regarding the social and economic impacts posed by physical (e.g., extreme weather and
wildfires) and cyber threats that, if not prevented or mitigated, can result in widespread and
long-lasting outages. As a result, the convergence and open-platform philosophy needs to be
tempered or incorporated with resilience measures that can reduce the vulnerability of the
electric grid but maintain the flexibility of the system.

Utilities typically improve the reliability and resilience of their systems through prudent asset
management practices (e.g., active monitoring, assessment), hardening or replacement of their
equipment, and improved protection schemes that can automatically isolate or reroute power
flow to reduce equipment damage and minimize outages. Such enhanced capabilities apply

y
STEM is a curriculum based on the idea of educating students in four specific disciplines—science, technology,
engineering, and mathematics (STEM)—in an integrated, interdisciplinary, and applied approach.

Smart Grid System Report 2020 | Page 29

 Department of Energy |January 2022

smart grid technologies and the application of real-time field conditions (i.e., data derived from
outage management systems, geographic information systems, and advanced metering
infrastructure) to enable field crews to restore power more quickly after system disturbances.

Strategic efforts to improve grid resilience will require careful planning and analysis, resulting in
the application of smart grid technologies where needed. At least three areas will require
strategic investments. First, as shown in Figure 15, the electric grid functions interdependently
with other critical infrastructures. The North American Energy Resilience Model, for example, is
the U.S. Department of Energy’s effort to examine infrastructure interactions and identify
actions that might best reduce vulnerabilities.45 The vulnerabilities associated with the tight
coupling of the electricity and natural gas systems can be addressed through structural
remedies (e.g., ensuring that natural gas pumping stations have sufficient back-up generation)
and improved coordination in planning and operations (e.g., ensuring that natural gas supplies
are sufficient to meet electricity needs as a result of extreme weather events). Second, the
application of novel grid configurations, such as microgrids and minigrids, can help improve
resilience, especially as a way to sustain critical civilian and defense functions, as discussed
above. Finally, the strategic application of energy storage technology provides an approach to
both improve system flexibility and resilience. In these cases, smart grid systems that can
ensure system observability, communication, analysis, and control will be needed.

FIGURE 15. INTERDEPENDENCIES BETWEEN CRITICAL INFRASTRUCTURES

Source: M. Finster, Argonne National Laboratory

Smart Grid System Report 2020 | Page 30

 Department of Energy |January 2022

F. Implications for Grid Modernization

The application of smart grid technology is fundamental for imparting needed grid capabilities
to account for the complex set of forces noted above. The main challenge is to formulate smart
grid deployment strategies that can address the increasingly dynamic nature of the electrical
system, while ensuring resilience, security, and affordability. In addition, optionality needs to be
preserved to better incorporate evolving policy and technological options. Figure 16 depicts
various scenarios that will need to be examined as the careful balance is considered between a
centralized and decentralized grid and between a grid with synchronous resources and one
with greater reliance on grid-following resources.z

FIGURE 16. VIEWS ON POTENTIAL GRID FUTURES

Source: DOE, AG R&D

As noted above, smart grid technology provides improved capabilities to manage grid
operations but is also needed to address the complex set of forces driving the need for a
dynamic and resilient electricity delivery system. As the system evolves, smart grid capabilities
will need to be continually improved and applied in the following key areas:

Coordination – the ability to allow or enable a set of decentralized elements to solve

common problems. Given the numbers of emerging devices and participants,

z
Synchronous resources are represented by power plants that generate electricity through large rotating machines
and thus, by their inertia, can maintain a frequency centered around 60 hertz throughout the grid. Synchronous
generation is provided by fossil fuel, nuclear, and hydropower plants. Inverter-based resources such as wind, solar,
and battery storage do not provide inertia to maintain system frequency and are termed grid-following resources.
A shift from synchronous to grid-following generation will require greater utilization of technologies that can
maintain system frequency, such as grid-forming power electronics devices.

Smart Grid System Report 2020 | Page 31

 Department of Energy |January 2022

coordination is needed for grid planning, operations, and market design and
implementation.

Scalability – the ability to accommodate an increasing number of endpoints or

participants without undertaking major system rework. An increasing number of
distributed energy assets that can change behavior dynamically will require structural
approaches and control strategies that can maintain the balanced optimization of those
resources with the overall system.

Observability – the ability to maintain temporal, geospatial, and topological awareness

of all grid variables and assets. Grid operators will need to observe and react to the state
of the system, including having knowledge of the instantaneous condition of all grid
components, the state of electrical capacity in energy storage and other devices, the
connectivity of grid networks, and ambient conditions (e.g., weather).

Security/resilience – the ability to prevent or mitigate impacts by physical or cyber

threats that might adversely affect grid performance. Designing the grid to protect
critical functions and to minimize exposure to malicious cyber intrusion is essential.

Flexibility – the ability to deal with variations in operating conditions with a given set of
grid assets and capabilities. Energy storage technology can help provide a buffering
capability that can smooth out variations in electricity supply and load.
Extensibility – the ability to modify the set of assets and capabilities to meet new
operating requirements outside the bounds of the existing grid. The convergence of
operations between the electric grid and other infrastructures, such as transportation,
buildings, and other energy systems, will require extending the core cyber-physical grid
platform.

Agility (to address faster system dynamics) – the ability to adjust quickly to maintain
grid performance. Sensing and responding to grid conditions in shorter timescales is
becoming increasingly important. For example, utilities are now developing sensing,
computing, and control technology that can deenergize power lines before they hit the
ground. aa

Interoperability – the ability of two or more systems or components to exchange

information and to use the information that has been exchanged. The myriad devices
and systems being deployed on the grid will need to function in coordination.

aa
For example, continuous point on wave (CPOW) is a high-resolution method of quickly monitoring voltage and
current conditions for advanced use cases such as incipient fault detection. More information on CPOW is available
from NASPI’s March 2020 report, High-resolution, Time-synchronized Grid Monitoring Devices, available at:
https://www.naspi.org/sites/default/files/reference_documents/pnnl_29770_naspi_hires_synch_grid_devices_20
200320.pdf.

Smart Grid System Report 2020 | Page 32

 Department of Energy |January 2022

Section Endnotes

1
U.S. DOE, Distribution Automation (DA) Smart Grid Investment Grant (SGIG) Program Report September 2016.
Available at:
https://www.energy.gov/sites/prod/files/2016/11/f34/Distribution%20Automation%20Summary%20Report_09-
29-16.pdf.
2
Solar Energies Industry Association and Wood-Mackenzie, Solar Market Insight 2020 Q3 Executive Summary.
Available at http://www2.seia.org/l/139231/2019-12-10/2jzzs8.
3
Wood Mackenzie, U.S. Energy Storage Monitor: 2020 year-in-review. Available at:
https://www.woodmac.com/research/products/power-and-renewables/us-energy-storage-monitor/
4
Table Sources: NC Clean Energy Technology Center, 50 States of Grid Modernization, Q1 2020 Quarterly Report,
April 2020. https://nccleantech.ncsu.edu/2020/04/30/the-50-states-of-grid-modernization-u-s-sees-busiest-
quarter-yet-for-state-and-utility-grid-modernization-activity/.
NC Clean Energy Technology Center, 50 States of Solar, Q1 2020 Quarterly Report, April 2020.
https://nccleantech.ncsu.edu/2020/04/22/the-50-states-of-solar-report-state-lawmakers-focus-on-expanding-
solar-options-during-q1-2020/.
NARUC, NASEO, Task Force Member States: Introductory Information. April 2019.
https://pubs.naruc.org/pub/67D4F994-B9A4-8A67-DF79-86F5FC4688D5.
Lawrence Berkeley National Laboratory, Southeast Regional Training of Distribution System Planning, PUC
Distribution Planning Practices. March 11–12, 2020. https://eta-publications.lbl.gov/sites/default/files/12_-
_schwartz_puc_distribution_planning_practices.pdf.
U.S. Department of Energy, Energy Efficiency & Renewable Energy, Alternative Fuels Data Center, Fuels & Vehicles,
Electricity Laws and Incentives. https://afdc.energy.gov/fuels/laws/ELEC.
Arkansas Public Service Commission, Docket 16-028-U, In the Matter of An Investigation of Policies Related to
Distributed Energy Resources. http://www.apscservices.info/efilings/docket_search_results.asp?casenumber=16-
028-U.
Connecticut Public Utilities Regulatory Authority, Docket 17-12-03RE09, PURA Investigation into Distribution
System Planning of the Electric Distribution Companies.
http://www.dpuc.state.ct.us/DOCKCURR.NSF/(Web+Main+View/All+Dockets)?OpenView&StartKey=17-12-03.
Connecticut Public Utilities Regulatory Authority, Docket 17-12-03RE04, PURA Investigation into Distribution
System Planning of The Electric Distribution Companies – Zero Emission Vehicles.
http://www.dpuc.state.ct.us/dockcurr.nsf/8e6fc37a54110e3e852576190052b64d/89c8001d834015f48525848900
5c1305?OpenDocument.
Virginia State Corporation Commission, Case: PUR-2020-00051, Electrification of Motor Vehicles.
https://scc.virginia.gov/DocketSearch#caseDetails/140702.
Smart Electric Power Alliance, 2019 Utility Energy Storage Market Snapshot, August 2019.
https://sepapower.org/resource/2019-utility-energy-storage-market-snapshot/.
U.S. Energy Storage Monitor: Q3 2018 Full Report, September 2018.
5
North Carolina Clean Energy Technology Center, Summary Maps.
https://programs.dsireusa.org/system/program/maps.
6
Commonwealth of Massachusetts, Clean Peak Energy Standard, 2020. https://www.mass.gov/service-
details/clean-peak-energy-standard.
7
National Association of Regulatory Utility Commissioners, Manual on Distributed Energy Resources Rate Design
and Compensation, NARUC Staff Subcommittee on Rate Design, November 2016.
https://pubs.naruc.org/pub/19FDF48B-AA57-5160-DBA1-BE2E9C2F7EA0.
8
North Carolina Clean Energy Technology Center, 50 States of Solar: Q4 2019 Quarterly Report& 2019 Annual
Review, January 2020. https://nccleantech.ncsu.edu/2020/01/29/4618/.
9
Stanton, Tom, Review of State Net Energy Metering and Successor Rate Designs, National Regulatory Research
Institute, 2019. https://pubs.naruc.org/pub/A107102C-92E5-776D-4114-9148841DE66B.

Smart Grid System Report 2020 | Page 33

 Department of Energy |January 2022

10
California Public Utilities Commission, Decision Adopting Short-Term Actions to Accelerate Microgrid Deployment
and Related Resiliency Solutions, Rulemaking 19-09-009, June 11, 2020.
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M339/K938/339938260.pdf.
11
Wood Mackenzie, Regulatory evolution for a decentralized electric grid: State of performance-based ratemaking
in the U.S., June 13, 2019. https://www.woodmac.com/our-expertise/focus/Power--Renewables/regulatory-
evolution-performancebasedratemaking/.
12
NCSU. 50 States of Grid Modernization. https://nccleantech.ncsu.edu/wp-content/uploads/2020/02/Q42019-
GridMod-Exec-Final2.pdf.
13
FERC, Electric Storage Participation in Markets Operated by Regional Transmission Organizations and
Independent System Operators, Docket Nos. RM16-23-000 and AD16-20-000, Order No. 841, issued February 15,
2018. https://elibrary.ferc.gov/idmws/common/OpenNat.asp?fileID=14823759.
14
FERC, Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission
Organizations and Independent System Operators, Docket No. RM18-9-000, Order No. 2222, Issued September 17,
2020. https://www.ferc.gov/sites/default/files/2020-09/E-1_0.pdf.
15
More Than Smart. Coordination of Transmission and Distribution Operations in a High Distributed Energy
Resource Electric Grid, June 2017, p.9. https://www.caiso.com/Documents/MoreThanSmartReport-
CoordinatingTransmission_DistributionGridOperations.pdf.
16
FERC, Order Accepting Proposed Tariff Revisions Subject to Condition, Docket No. ER16-1085-000, June 2, 2016.
https://www.ferc.gov/CalendarFiles/20160602164336-ER16-1085-000.pdf.
17
NYISO, New York Independent System Operator, Inc., Proposed Tariff Revisions Regarding Establishment of
Participation Model for Aggregation of Resources, Including Distributed Energy Resources, and Proposed Effective
Dates, Docket ER19-2276-000, June 27, 2019.
https://nyisoviewer.etariff.biz/ViewerDocLibrary//Filing/Filing1485/Attachments/20190627%20Trnsmttl%20Ltr%2
0DER%20205%20Flng.pdf.
18
NYISO, NYISO Program Update, July 26, 2018.
https://www.nyiso.com/documents/20142/2548045/NYISO%20Pilot%20Program%20MIWG%20072618.pdf/418a9
f47-d5a8-a11b-c68e-7542d0b3b25c.
19
DOE Grid Modernization Laboratory Consortium, State Engagement in Electric Distribution System Planning,
December 2017. Available at: https://eta-
publications.lbl.gov/sites/default/files/state_engagement_in_dsp_final_rev2.pdf.
20
Navigant, Non-Wires Alternatives Tracker 3Q19.
21
“Advanced IDP practices” include states with a regulatory or state policy and activities surrounding non-wires
alternatives, hosting capacity, or locational value. “Developing IDP approaches” represent states with some
components of integrated distribution planning in place.
22
GridWise Alliance, Grid Modernization Index 2018, December 2018. Available online at:
https://gridwise.org/grid-modernization-index/.
23
NARUC, Task Force on Comprehensive Electricity Planning, https://www.naruc.org/taskforce/.
24
Hawaiian Electric Companies’ Integrated Grid Planning Report, July 2018,
https://www.hawaiianelectric.com/documents/clean_energy_hawaii/integrated_grid_planning/20180713_dkt_20
18_0165.pdf.
25
SEPA, PLMA, E4, Non-Wires Alternatives Case Studies from Leading U.S. Projects, November 2018,
https://www.peakload.org/assets/news/2018%20Non-Wires%20Alternatives%20Report_FINAL%20compress.pdf.
26
California SB-1215 Electricity: microgrids
http://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=201920200SB1215.
27
CPUC, Decision Adopting Short-term Actions to Accelerate Microgrid Deployment and Related Resiliency
Solutions. Rulemaking 19-09-009. June 11, 2020. Available at:
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M340/K748/340748922.PDF.
28
Massachusetts Bill H.3997, An act relative to GreenWorks, https://malegislature.gov/Bills/191/H3997.

Smart Grid System Report 2020 | Page 34

 Department of Energy |January 2022

29
Massachusetts Bill H.3997, An act authorizing resiliency measures under commercial property assessed clean
energy https://malegislature.gov/Bills/191/H2831.
30
New Jersey bill A2374, Directs EDA to establish program for public or private financing of certain renewable
energy, water, and storm resiliency projects through use by municipalities of voluntary special assessments for
certain property owners, https://www.njleg.state.nj.us/bills/BillView.asp?BillNumber=A2374.
31
Oregon Senate bill 1537, https://olis.oregonlegislature.gov/liz/2020R1/Downloads/MeasureDocument/SB1537.
32
Oregon Guidebook for Local Energy Resilience, https://www.oregon.gov/energy/safety-
resiliency/Documents/Oregon-Resilience-Guidebook-COUs.pdf.
33
Oregon House Bill 2193, https://olis.leg.state.or.us/liz/2015R1/Downloads/MeasureDocument/HB2193.
34
SEPA, Modernizing the Energy Delivery System for Increased Sustainability, May 2019,
https://dcpsc.org/PSCDC/media/PDFFiles/HotTopics/GridModernizationFinalReport.pdf.
35
Hawaii House Bill 2110, Relating to Resiliency, https://www.capitol.hawaii.gov/session2018/bills/HB2110_.HTM.
36
Public Service Commission of Maryland, Case No. 9361, https://www.psc.state.md.us/wp-
content/uploads/Order-No.-88836-Case-No.-9361-Pepco-Microgrid-Order.pdf.
37
UtilityDive, Maryland PSC rejects Baltimore microgrid proposal, https://www.utilitydive.com/news/maryland-
psc-rejects-baltimore-microgrid-proposal/423063/.
38
Michigan House Bill No. 4477, http://www.legislature.mi.gov/documents/2019-
2020/billintroduced/House/pdf/2019-HIB-4477.pdf.
39
From How to Design Multi-User Microgrid Tariffs, by P. De Martini, J. Leader, B. Blair, and H. Cutler, Smart
Electric Power Alliance in partnership with the Pacific Energy Institute, August 2020.
40
Final Resolution and Order on the Puerto Rico Electric Power Authority’s Integrated Resource Plan, Case No.:
CEPR-AP-2018-0001, Government of Puerto Rico Public Service Regulatory Board, Puerto Rico Energy Bureau,
August 21, 2020. https://energia.pr.gov/wp-content/uploads/sites/8/2020/08/AP20180001-IRP-Final-Resolution-
and-Order.pdf.
41
How to Design Multi-User Microgrid Tariffs, by P. De Martini, J. Leader, B. Blair, and H. Cutler, the Smart Electric
Power Alliance in partnership with the Pacific Energy Institute, August 2020. https://sepapower.org/resource/how-
to-design-multi-user-microgrid-tariffs/.
42
Grid Architecture 2, JD Taft, PNNL-24044 2, January 2016. https://gridarchitecture.pnnl.gov/media/white-
papers/GridArchitecture2final.pdf.
43
Value Creation through Integrated Networks and Convergence, by Paul De Martini and Jeffrey Taft, Pacific
Northwest National Laboratory, PNNL-24152, February 2015.
https://gridarchitecture.pnnl.gov/media/advanced/Electric%20Networks%20%20Convergence%20final%20version
%20%20Mar%2015%202015.pdf.
44
Ibid.
45
U.S. DOE, North American Energy Resilience Model, Office of Electricity, July 2019.
https://www.energy.gov/sites/prod/files/2019/07/f65/NAERM_Report_public_version_072219_508.pdf.

Smart Grid System Report 2020 | Page 35

 Department of Energy |January 2022

IV. Investments and Technology Applications

American electric utilities invested more than $70 billion in transmission and distribution
equipment, systems, and services in 2016. 1,2 Although much of this capital investment has been
for equipment refurbishment, replacement of obsolete equipment, or expansion of grid
infrastructure, a growing portion has been and continues to be allocated to grid modernization
or “smart grid” development.

Utility investments in smart grid include information technology (IT) and operational technology
(OT). IT includes management of information for business systems, such as payroll, billing, and
other administrative systems. OT includes management of physical grid devices and operation
of control and monitoring systems for generation, transmission, and distribution of electricity.
Smart grid technologies are integrated within both IT and OT systems.

In 2020, total capital spending on digital technologies (IT and OT) by U.S. electric utilities was
approximately $15 billion per year. It is projected to reach over $24.5 billion by 2026. The
largest portion of that spending is specifically for smart grid technologies and systems:
$8.3 billion in smart grid investments in 2020, projected to reach $16.4 billion by 2026.

Figure 17 shows past and projected growth in capital spending on digital technologies over
12 years and designates what portion went toward smart grid devices and related IT and OT
systems. Whereas non-smart-grid investments in IT/OT remain steady, investments in “pure”
smart grid technologies and related IT and OT systems are growing significantly.

Smart Grid System Report 2020 | Page 36

 Department of Energy |January 2022

FIGURE 17. ANNUAL GRID TECHNOLOGY INVESTMENT, INCLUDING SMART GRID INVESTMENT bb

Source: Newton Evans. Data represent total electricity sector, as extrapolated from market studies and direct
surveys representing 10%–30% of U.S. or North American markets, in terms of customers services, number of
substations, or revenues.

Figure 18 provides examples of the types of technologies included in each category. In this
breakdown, “pure smart grid” devices consist of the field hardware that senses, monitors, or
controls the grid. For example, line sensors that capture key grid conditions necessary for
system operators and the automated system to perform their functions; automated switches
and protective devices that detect and isolate problems on the grid; and Distributed Energy
Resource (DER) interface systems, such as smart inverters, that autonomously adjust
operations on the basis of grid conditions.

Pure smart grid devices deliver data and signals to the data management and control systems in
the “smart grid-related” IT and OT categories. For example, related IT systems include meter
data management systems that collect advanced metering infrastructure (AMI) data and
integrate with billing systems to improve efficiency. Related OT systems include distribution
automation systems, which collect data from line sensors and control automated switching
functions. Additionally, utilities can leverage smart meters to provide additional sensing that
supports outage and voltage management functions.

bb
The impacts of COVID-19 on smart grid investment are unclear as this report is being prepared. Future grid
investments could be impacted. The projections, however, do not attempt to capture these potential effects.

Smart Grid System Report 2020 | Page 37

 Department of Energy |January 2022

Many smart grid investments tend to be associated with utility operations and engineering
organizations, or with customer-centered activities (e.g., automatic metering, energy storage,
small-scale generation). Utility IT departments, however, tend to be responsible for the ongoing
information processing requirements for activities like metering, billing, and outage
management, or any other activities that might financially impact customers.

FIGURE 18. TECHNOLOGIES AND RESOURCES ACROSS TRANSMISSION, DISTRIBUTION, AND CUSTOMER
SYSTEMS

Aligned with technology deployment concepts described in the Next-Generation Distribution

System Platform (DSPx) project,cc certain grid components build from one another. Not every
situation, however, needs all functionality or system-wide deployment of grid components.
Where smart grid components are siloed, additional integration can be complex and costly.
System planners should begin considering system architecture, even when deploying “stand-
alone” devices, as the ultimate grid capabilities are enhanced or limited on the basis of these
decisions and hardware.

A. The Transmission System

Data available from the U.S. Energy Information Administration (EIA) and the Edison Electric
Institute (EEI), the trade association for investor-owned utilities (IOUs), indicate that total IOU

cc
This DOE project developed guidance to help develop and evaluate distribution grid modernization. More
information is available at https://gridarchitecture.pnnl.gov/modern-grid-distribution-project.aspx.

Smart Grid System Report 2020 | Page 38

 Department of Energy |January 2022

transmission-related capital investments were projected to reach $25 billion by 2019, with
approximately an additional $4.4 billion attributed to public utilitydd and generation and
transmission cooperatives, as shown in Figure 19. ee Separately, operation and maintenance
costs for all transmission owners totaled approximately $14.1 billion in 2019. Robust
transmission enables market reach and aggregation, which could lower prices, while making
possible the fuel transformation of the United States (from conventional to renewable
resources).

FIGURE 19. INVESTMENT IN TRANSMISSION INFRASTRUCTURE

Source: Edison Electric Institute, Statistical Yearbook, Published June 2019

The transmission system consists of high-voltage networked lines and switching stations
(typically greater than 69 kV) that delivers electricity from generator plants to distribution
systems, as shown in Figure 20. In the United States, transmission lines form the basis of three
wide-area synchronous grids, also known as “interconnects.” Utility transmission operators,
independent system operators (ISOs), and regional transmission organizations (RTOs) are
responsible for planning and operating portions of the interconnects, depending on the market
structure, on time-scale intervals ranging from sub-seconds to years.

The 72 balancing authorities in the United States are responsible for controlling generation and
transmission to meet real-time energy demands, balancing supply and demand.3 These entities
use energy management systems (EMS) to control power flows within constraints (e.g., thermal

dd
Utilities, and entities like Tennessee Valley Authority, Los Angeles Department of Water and Power, and New
York Power Authority, collectively own approximately 67,000 miles of transmission lines.
ee
In the United States, 27 generation and transmission cooperatives and public power entities collectively own
approximately 127,000 miles of transmission lines, or about 17.5% of all transmission. The overall transmission
investment is scaled to include non-IOU investments.

Smart Grid System Report 2020 | Page 39

 Department of Energy |January 2022

and voltage) and to receive alarms for equipment issues or line faults. EMS systems receive
data from field devices through supervisory control and data acquisition (SCADA) systems using
various communication media (e.g., fiber, wireless). SCADA systems collect information from
devices such as equipment and line sensors, meters, and circuit breakers. Phasor measurement
units (PMUs) are an example of an advanced sensor that has gained traction in the industry
since 2009, but they are still in limited use. Other specialized systems such as dynamic line
rating (DLR) use a combination of sensors, forecasting, communications, and computing
technology for managing physical line constraints. EMS systems are starting to incorporate
advanced applications to include recent technologies such as PMU and DLR. As such, the
modern transmission system is a combination of physical and cyber systems.

FIGURE 20. TRANSMISSION SYSTEM IN RELATION TO POWER GENERATION AND DISTRIBUTION

Source: Electrical Academia

Transmission systems are relatively mature, compared to distribution and customer systems,
which are evolving at a faster pace. DER adoption and changes to distribution planning and
operations, however, are driving new transmission observability and control needs. The
following sections describe recent transmission smart grid technology in the areas of DLRs and
PMUs.

1. DYNAMIC LINE RATINGS

DLR systems are technologies and computational methods that help determine the real-time
and forecasted current-carrying capacity (or ampacity rating) of transmission lines on the basis
of measurements of ambient conditions and the status of the line. In principle, DLR uses the
same heat-balance equations as traditional static line rating but includes a more sophisticated
time-varying component based on measured and forecasted weather and line conditions. The
main objective of using DLR systems is to help system operators determine, accurately and
reliably, the physical current carrying capacity on the basis of thermal considerations.4

Smart Grid System Report 2020 | Page 40

 Department of Energy |January 2022

Transmission system operators and planners can

use transmission line ratings to manage risk and Factors Affecting Line Ratings
reliability of the transmission system. Exceeding
transmission line ratings can cause a line to sag Transmission line rating refers to the maximum
power a line can carry. Ratings are based on an
into the ground, causing a fault and outage.
acceptable level of conductor heating and
Because dynamic ratings are often higher than resulting line sag. Too much heating causes a
the ratings from traditional methods, on the conductor to irreparable stretch (anneal) or to
basis of static calculations with worst-case fail. The main factors influencing line ratings
assumptions, DLR systems enable operators to include the amount of electric current flow and
weather conditions.
adjust line ratings for real-time and forecasted
conditions to increase available capacity that Heating factors
otherwise would be unused. DLR deployment
has been limited to date, with many ISOs/RTOs • Electrical current flow has a heating effect.
and utilities still in the demonstration and • Solar irradiance heats the line.
piloting phase to prove its capabilities, benefits, Cooling factors
and costs.
• Wind has a cooling effect on the line. Wind
According to a 2019 DOE congressional report, direction is significant to the level of cooling,
the United States lags other countries in with wind traveling in a direction
deploying DLR, in part due to regulatory and perpendicular to the line having more effect.
market constructs, as discussed below. 5 • Cooler ambient air temperature assists
Additionally, first-generation DLR technology radiant heat transfer. The cooler the
has had challenges, including lack of usable data temperature, the faster the heat transfer.
and its transparency, complexity of installation,
and limitations of indirect measurement
methods. Utilities and technology providers Solar
have addressed many of the first-generation Heating
issues, however, and continue to improve data Electrical
quality, installation and communications, and Conductor
actionable line ratings. Figure 21 depicts Electrical
Current
common system components associated with a Heating
Wind
Cooling
DLR deployment. (Joule Effect)
Radiative
Cooling

Smart Grid System Report 2020 | Page 41

 Department of Energy |January 2022

FIGURE 21. DYNAMIC LINE RATING TECHNOLOGY IN TRANSMISSION SYSTEM OPERATIONS

Source: ICF, Draft DOE report on Transmission Dynamic Line Ratings: Adoption and Implementation Opportunities

Recent studies illustrate that, under the right

Dynamic Line Rating Devices
conditions, DLR applications are cost-effective
solutions to manage line congestion and operational DLR devices currently available on the
risk. For example, a study by American Electric Power market package multiple sensors to
provide information on a range of
on the 345 kV Cook-to-Olive transmission line between parameters including:
Michigan and Illinois showed that a $500,000 DLR
• Line clearance to ground using an
solution could provide an annual net congestion cost
onboard LIDAR sensor
savings of more than $4 million by reducing line • Conductor and ambient
congestion by five percent. 6 This compares to a cost of temperature
$22 million to $176 million for a traditional • Line current
transmission system upgrade to alleviate congestion. ff • Conductor vibration
Extrapolating this five percent congestion benefit to six
of the U.S. ISOs/RTOs is equivalent to approximately
$240 million in annual net congestion cost savings. gg

In addition to congestion relief, DLR also can be used

as a risk mitigation technique for operators to be
aware of, and react to, when the dynamic line rating is
lower than the static rating—a condition that could
lead to reliability risks. Image courtesy of Lindsey Manufacturing Co.

ff
This comparison focuses specifically on the benefits from congestion relief. A traditional transmission solution
could provide other benefits, depending on the type of upgrade implemented.
gg
Annual congestion cost for six U.S. ISOs/RTOs was estimated at $4.8 billion in 2016 (see U.S. Department of
Energy, Dynamic Line Rating, Report to Congress, June 2019). Applying the same five percent benefit derived by
American Electric Power to these ISOs/RTOs would result in an estimated $240-million benefit. The six ISOs/RTOs
included in this estimate are the California Independent System Operator (CAISO, Electricity Reliability Council of
Texas (ERCOT), Independent System Operator New England (ISO-NE), Midcontinent Independent System Operator
(MISO), New York Independent System Operator (NYISO, and PJM.

Smart Grid System Report 2020 | Page 42

 Department of Energy |January 2022

Figure 22 illustrates how these risks of unknown overloads might occur occasionally for
operators relying on static or seasonal line rating. hh

FIGURE 22. ILLUSTRATION OF DLR RATING PROVIDING ADDITIONAL LINE CAPACITY

Source: ICF, Draft DOE report on Transmission Dynamic Line Ratings: Adoption and Implementation Opportunities

Despite the potential benefits DLR can provide, along with technology advancements in recent
years, challenges to its broader adoption remain. First, the current U.S. regulatory environment
provides transmission owners little incentive to maximize power delivery over existing lines or
reduce congestion. Second, because DLR adoption could influence wholesale power markets, it
might affect the profitability or viability of existing generation resources. Finally, system
planners and operators must integrate DLR into existing systems in a way that avoids new
hazards or presents unanticipated risks to system operators (e.g., overrating of a line leading to
a reliability issue). Taken in combination, these issues have led to relatively low adoption by
ISOs/RTOs and utilities, as shown in Figure 23.

hh
The figure includes ambient adjusted ratings (AAR). AAR are adjusted in near real time on the basis of ambient
temperature, an important factor for DLR, but do not include other DLR inputs such as wind speed or solar
irradiance.

Smart Grid System Report 2020 | Page 43

 Department of Energy |January 2022

FIGURE 23. ISO/RTO LINE RATING METHODS

Source: ICF

2. PHASOR MEASUREMENT UNITS

A PMU is a device that measures voltage, current, and frequency at a point on the grid and
provides time-stamped data with sample rates at least 100 times faster (e.g., 30–120
measurements per second) than traditional SCADA monitoring, as shown in Figure 24. The
time-synchronized measured values, called synchrophasors, from different points on the grid
(e.g., located at transmission substations) enable operators to determine the system state and
identify any dynamic events using wide-area measurement systems. ii The higher resolution and
precise time synchronization crucially improve upon conventional measurements, by revealing
subtle changes and dynamics across the grid. System operators leverage these data to support
off-line engineering analyses (e.g., system protection post-event analysis) and, to a lesser
degree, real-time operations.

ii
Dynamic events include system oscillations. When the electrical system is physically disturbed, the electrical
characteristics (voltages, currents, and other parameters derived from these) of the electrical system also are
disturbed. Because these voltages, currents, frequencies, etc. tend to cycle quickly (analogous to physical
vibrations), the disturbances are referred to as “oscillations.” Oscillations become a concern when they grow over
time instead of wane. PMUs provide an early warning system for the detection of oscillations.

Smart Grid System Report 2020 | Page 44

 Department of Energy |January 2022

FIGURE 24. RELATIVE TIME SCALES OF MEASUREMENTS AND SAMPLING

Source: A. von Meier, University of California - Berkeley

The American Recovery and Reinvestment Act (ARRA) synchrophasor project supported the
installation of over 1,380 PMUs across North America, contributing to the more than 2,500
PMUs installed by 2017, as depicted geographically in Figure 25. 7,8 These PMUs are discrete
devices enabling the sharing of system conditions among grid operators. PMU technology,
however, is becoming a common feature within protective relaying systems and microgrid
controllers. 9

FIGURE 25. NORTH AMERICA PMU DEPLOYMENTS, 2017

Smart Grid System Report 2020 | Page 45

 Department of Energy |January 2022

As captured in Figure 26, three important communication interfaces are associated with PMUs.
First, the PMU communicates directly with substation automation technology through
protocols such as IEC 61850. jj Second, PMUs within a specific geographic region are transferred
via communications to a phasor data concentrator (PDC) via Institute for Electronic and
Electrical Engineers (IEEE) kk C37.118.2-2011 messaging using standard communication
protocols. The standard does not specify communication medium (e.g., fiber, microwave radio),
but low-latency, high-bandwidth communications methods such as fiber optics are best suited
for PMU applications. Finally, the PDCs transmit these data to the control center via the Inter-
Control Center Communications Protocol (ICCP). Equipment standards IEC/IEEE 60255-118-1-
2018 and IEEE C37.247-2019 define requirements for the PMUs and PDCs, respectively. On the
basis of a 2014 National Institute of Standards and Technology study showing poor equipment
compliance with standards, IEEE developed a Conformity Assessment Program (ICAP) for
equipment manufacturers to certify their equipment to the applicable industry standards.10
ICAP currently has certified four vendor products and is actively working with vendors to certify
additional products. 11 ICAP’s certification ensures accurate and consistent measurements using
IEC/IEEE 60255-118-1-2018.

FIGURE 26. STRUCTURE OF A WIDE-AREA MONITORING SYSTEM WITH PHASOR-MEASUREMENT

UNITS 12

jj
IEC is the International Electrotechnical Commission, a standards development organization, and IEC 61850 is a
widely used communications protocol standard. Standards are described in greater detail in Section V.D.
kk
IEEE is the Institute of Electrical and Electronics Engineers. In addition to journals and conference proceedings,
the IEEE publishes industry standards that are produced by industry-led standardization committees.

Smart Grid System Report 2020 | Page 46

 Department of Energy |January 2022

Source: Seimens, Phasor Measurment Unit

The
FIGURE 27. INSTALLATION OF A MICRO-
SYNCHROPHASOR ON A DISTRIBUTION POLE
(SOURCE: ARPA-E)
University of Tennessee in Knoxville and
Oak Ridge National Laboratory collaborated
to create a map of synchronized sensors on
the U.S. grid by deploying a system of global
positioning systems (GPS) synchronized
sensors that measure the grid’s voltage angle
and frequency on a wide-area basis. 13
Representing the broadest wide-area
electricity system network globally, it
allows users to monitor the real-time conditions
of each North American interconnection.

In addition, researchers at the University of California-Berkeley, with support from Advanced

Research Projects Agency-Energy (ARPA-E) funding, are exploring distribution applications for
PMUs to improve power flow controls and system reliability. 14 These distribution applications
of PMU technology, sometimes called micro-synchrophasors, could be used for event
detection, topology detection, model validation, and DER integration. 15 The ARPA-E project
included a high-speed database to manage the large influx of data the PMU devices generated.
Figure 27 shows a PMU on a distribution pole as part of this project.

The opportunities for using PMU technology come with several technical and institutional
challenges. PMUs have relatively low upfront capital costs but high O&M costs to maintain field
devices, communication networks, and databases. The proliferation of PMUs is creating a large
data challenge for system operators, with a single PMU generating around two million data
points per day. 16 For instance, a network of 100 PMUs needs data storage capacity of around
50 GB/day and 1.5 TB/month. 17 Establishing and maintaining a low-latency communication
network for transferring the vast amounts of data also is a challenge. For this data to be useful
information, the various devices and systems (PMUs, PDCs, etc.) need to be interoperable
among different equipment vendors. Some aspects of this issue are being addressed through
industry standards such as IEEE C37.118.2-2011. Further, the promise of using synchrophasor
data for real-time operations comes with cybersecurity challenges, most notably the NERC CIP
requirements. Finally, the high bandwidth, high frequency, and sheer volume of PMU data lead
to special requirements for implementing analytics, visualizations, and methods for information
storage and retrieval, which are areas currently under development. 18

Smart Grid System Report 2020 | Page 47

 Department of Energy |January 2022

B. The Distribution System

According to the EIA, distribution grid capital investment for IOUs ll reached nearly $39 billion in
2019. By broadening the data to include all U.S. distribution utilities (approximately 3,000),
distribution grid capital investment in 2019 reached nearly $51 billion. Figure 28 illustrates that
growth in distribution capital investments has continued apace through 2019, and expectations
are that these investments are likely to continue growing.

FIGURE 28. ANNUAL ELECTRIC DISTRIBUTION SYSTEM COSTS FOR MAJOR U.S. UTILITIES mm

Source: EEI, Statistical Yearbook, Published June 2019

Distribution systems deliver electricity from the transmission system to customers. In contrast
to transmission lines, distribution lines are typically radial and operate at medium voltage levels
(typically less than 35 kV), although systems serving densely populated urban areas might be
looped or networked, allowing switching among the lines to better contain outages.

There are three types of electric and gas utilities. IOUs are privately owned companies that have their rates set
ll

and regulated by a state public utilities commission, and they provide a return to investors. Public power utilities,
which are municipally owned and often referred to as “munis,” are nonprofit agencies with the objective of
providing service to their local community and are governed by the utility’s governing body or city council. Electric
cooperatives, or co-ops, are private nonprofit businesses directly owned by the customers they serve and are
governed by an elected board of directors.
mm
The figure illustrates distribution systems costs for U.S. IOUs; estimates for the total distribution costs for all
U.S. electric utilities (including public power utilities and cooperative utilities) would increase the amounts shown
by another 30%.

Smart Grid System Report 2020 | Page 48

 Department of Energy |January 2022

The distribution system is expansive, with the total number of line miles in the United States
orders of magnitude greater than that of the high-voltage transmission system.

Historically, distribution system planners and operators had limited visibility and control for
distribution systems, but that has been changing in recent decades with a proliferation of
intelligent field devices, communications, and back-end software systems. Now system
operators are using a range of sensors and field devices to determine grid conditions and take
appropriate actions. Increasingly, the control actions are carried out by automated, closed-loop
systems. For instance, an ADMS can use distribution SCADA (D-SCADA) to collect voltage and
current information from sensors and protective device controls to manage voltage or restore
power automatically after an outage. Deploying an ADMS involves integration with other
systems, as described below, and uses static data (e.g., network connectivity) and dynamic data
(e.g., customer outages) to inform the network model.

Figure 29 shows a geographic view of expansive and complex circuitry of a distribution grid
within a densely populated area. The topology of these systems is much more diverse when
compared to the transmission grid. Based on this diversity and complexity, fully deploying the
cyber layer (e.g., sensing, communications and control) for distribution is quite challenging and
will take time.

FIGURE 29. DISTRIBUTION SYSTEM CIRCUITS WITHIN A SMALL GEOGRAPHIC AREA

Source: National Renewable Energy Laboratory

Distribution system owners across the United States are embarking on the prolonged process of
extending the cyber layer from distribution substations (i.e., the interface with transmission) to
the grid edge where customers are served.

Smart Grid System Report 2020 | Page 49

 Department of Energy |January 2022

In practice, this extension involves deploying sensors, intelligent controls, communications

networks, and computing and software applications across a broad swath of the system to
meet specific objectives, typically through a planning process as discussed in Section V.B. The
following sections describe technologies and applications that are part of the distribution
system transformation currently underway.

1. ADVANCED DISTRIBUTION MANAGEMENT SYSTEMS

ADMS support grid operations and can collect, organize, display, and analyze real-time
distribution system information across several systems. These systems allow operators to
manage distribution system operations to increase system efficiency, improve reliability, and
prevent overloads. By interacting with other operational systems such as a GIS, OMS, and
customer information system (CIS), an ADMS can create an integrated view of distribution
operations.19,20 Figure 30 shows an ADMS display that integrates static and dynamic data from
the substation, field devices, and a variety of systems to provide additional insight into grid
operations. ADMS systems have features useful to distribution planners, such as an accurate,
well-maintained network model and more granular historical power flow data.

FIGURE 30. EXAMPLE ADMS DISPLAY

Source: Quasar

An ADMS provides utilities a centralized system that can enable applications for managing the
grid. The most common functions utilities use as part of existing ADMS deployments are fault

Smart Grid System Report 2020 | Page 50

 Department of Energy |January 2022

location isolation and service restoration (FLISR), SCADA, and VVO. 21,nn The range of functions
that utilities can support through ADMS, as shown in Figure 31, however, is much broader.

FIGURE 31. ILLUSTRATIVE ADMS INTEGRATION OF DISPARATE SYSTEMS, FUNCTIONS, AND DATA 22

Source: OSI, Advanced Distribution Management Systems

The ADMS midrange market estimate is around $80 million for 2020 and is expected to grow to
more than $200 million by 2026. 23,oo Utilities must address certain challenges, however, when
contemplating ADMS deployment. The most prominent is the availability, integrity, and
robustness of the network model data pp that are inputs to the system. The ability to execute
power flow solutions and fault location analysis—the foundation for advanced applications
such as automated outage restoration (e.g., FLISR)—depends on an accurate and finely-tuned
network model.

For example, Arizona Public Service’s (APS) ADMS implementation depended on the ability to
leverage its GIS as a primary data source and coupling it with a detailed network model. 24 With

nn
Appendix VII.B shows a survey of utility interest in several ADMS applications and use cases.
oo
Annual ADMS annual market estimates (low, mid, and high) for 2020 through 2026 are shown in Appendix VII.B.
pp
Network model data include the electrical characteristics (e.g., equipment impedance) and topology (e.g., line
lengths, connectivity).

Smart Grid System Report 2020 | Page 51

 Department of Energy |January 2022

the GIS providing critical data, APS also identified the need to focus on the many forms data
integrity can take within its network model. They therefore implemented new quality assurance
tools and coding practices to ensure continued data integrity after an intensive cleanup
effort.qq Although APS was able to implement its ADMS successfully in 2017, the data
challenges it overcame are characteristic of most utilities similarly exploring ADMS
implementation. 25

In addition to this core data challenge, other challenges for ADMS implementation remain.
First, because an ADMS represents a significant investment for utilities, the business case for its
implementation must be compelling, and the benefits it will provide must be clear. Second,
integrating the patchwork of different operational systems into a centralized ADMS poses
significant technical challenges. 26 Finally, utilities must contemplate tradeoffs between
increased sensor deployment (i.e., enabling greater data collection on the current grid state)
and model improvements to achieve desired accuracy of modeling results.

2. FAULT LOCATION, ISOLATION, AND SERVICE RESTORATION: AN ADVANCED

DISTRIBUTION MANAGEMENT SYSTEM APPLICATION OR DECENTRALIZED
SYSTEM
FLISR is a software application and collection of field devices that automates distribution
operations to detect and respond quickly to grid problems (timescale of seconds), such as
storm-induced outages, to restore power to customers. FLISR devices and systems often
include line sensors, automated switches or reclosers, communication networks, and a control
system (e.g., an ADMS application or distributed control). FLISR tends to be best suited for
urban and suburban environments where distribution circuits tie to one another, allowing for
options to reroute power during a system issue. Although an important tool, FLISR is just one of
many options (e.g., system hardening and undergrounding facilities) for improving reliability.
Figure 32 shows a typical automated process implemented through a FLISR system.

qq
A network model is a computer representation of the actual physical distribution system utilities operate that
includes information such as connectivity and static electrical parameters (e.g., impedance, ratings). Most ADMS
applications rely on an accurate network model to function properly.

Smart Grid System Report 2020 | Page 52

 Department of Energy |January 2022

FIGURE 32. ILLUSTRATIVE APPLICATION OF FLISR 27

Source: DOE, Fault Location, Isolation, and Service Restoration Technologies Reduce Outage Impact and Duration:
Smart Grid Investment Grant Program, December 2014

Because FLISR controls can be part of a centralized ADMS or distributed within field device
controls, utility planners need to consider the relative advantages and disadvantages of each
when developing a deployment strategy. For example, whereas centralized implementation as
part of an ADMS can use real-time system configuration and loading information to inform
reconfiguration decisions, and are highly scalable, decentralized systems offer the benefit of
reducing single points of failure (e.g., communications backhaul from field to control center).

Widespread FLISR deployments can help utilities improve grid performance as measured by
standardized metrics associated with outage average duration and frequency. According to a
2016 DOE report containing results from 62 Smart Grid Investment Grant projects
implementing distribution automation technologies, five utilities reporting on reliability
improvement over one year indicated distribution automation reduced the number of
interrupted customers by 55 percent and the customer minutes interrupted by 53 percent.28

Smart Grid System Report 2020 | Page 53

 Department of Energy |January 2022

Similarly, for 16 utilities reporting data over

Three Metrics of System Reliability
four years, distribution automation avoided
over 197,000 truck rolls, which led to an System Average Interruption Duration Index
avoided 3.4 million vehicle miles traveled. The (SAIDI): Measures the total duration of an
DOE report also found that distribution interruption for an average customer during a
automation can provide additional benefits, specified time.
including enhanced system resilience to Customer Average Interruption Duration
extreme weather events, more effective Index (CAIDI): Measures the amount of time to
equipment monitoring and preventive restore service after an outage occurs.
maintenance, and improved DER grid
System Average Interruption Frequency Index
integration.
(SAIFI): Measures the average number of times
a customer experiences an outage during a
A recent Pacific Gas & Electric Co. (PG&E) FLISR
year (or the relevant period).
deployment provides a case study on the
potential for FLISR to improve reliability. SAIFI = SAIDI / CAIDI
PG&E’s FLISR deployment to approximately 30
percent of circuits at a cost of $194 million
derived an estimated 391 million avoided customer outage minutes, which translates to a
benefit of $828.8 million. 29 Separately, Southern California Edison, another California IOU, plans
to deploy automation on 25 percent to 50 percent of its distribution circuits through 2028. 30
The continued deployment of distribution automation technologies will enable a growing
number of utilities to improve distribution system reliability.

3. Advanced Metering Infrastructure

AMI is an integrated system of smart meters, communications networks, and data management
systems that provides a two-way digital link between utilities and customers. These meters
collect customer data at regular intervals (typically every 15 minutes). Given the vast quantity
of data these meters generate, the meters often deliver the data to a local data concentrator
and the utility will backhaul the data to its meter data management system and operations
center only a few times per day to assist with customer billing and load forecasting, as Figure 33
depicts. There is currently a shift to using smart meters as a sensor to support real-time grid
operations in addition to providing improved customer billing capabilities.

Smart Grid System Report 2020 | Page 54

 Department of Energy |January 2022

FIGURE 33. BASIC COMPONENTS OF AN AMI SYSTEM 31

Data
Concentrator

Source: M. Benmalek, Y. Challal, Efficient Multi-Group Key Management Scheme for Secure Communications in AMI
Systems

AMI can support a wide range of applications, as illustrated in Figure 34, depending on how the
technology is used, each with the goal of saving energy, making system operations more
efficient, and increasing situational awareness. Some applications focus specifically on
customer actions in response to having received usage data or variable price signals. Other
applications rely on the meter as a sensor to support voltage management or to perform
automatic restoration when customers experience a service quality issue. AMI deployment has
occurred at varying levels across the country, as shown in Figure 35. For example, although
nearly 100 million smart meters are currently deployed in the United States, 21 states (as of
2018) had AMI deployment for over 50 percent of customers, while 8 states had less than 15
percent penetration. 32

AMI deployment is generally categorized as being part of one of two waves. As part of the first
wave—largely driven by ARRA funding—utilities primarily installed AMI to support customer
billing, advanced rate implementation, and some targeted utility operational use cases. The
second wave of AMI deployment, however, which is still underway, entails a move to more
edge computing and interoperability with home networks. This second wave is enabling utilities
to bolster advanced outage management capabilities and voltage management, support an
emerging planning and operations capability of disaggregating load rr, and automate processes
like service orders and customer alerts. 33

Load disaggregation is a process used to better understand the existence and characteristics of individual loads
rr

behind a customer meter.

Smart Grid System Report 2020 | Page 55

 Department of Energy |January 2022

FIGURE 34. AMI USE CASES 34

Source: ACEEE, Leveraging Advanced Metering Infrastructure to Save Energy

FIGURE 35. SMART METER DEPLOYMENT BY STATE, 2018 (PERCENTAGE OF CUSTOMERS)

Source: Edison Foundation, Electric Company Smart Meter Deployments

As utilities explore possible pathways to capture the benefits of the second wave of AMI, many
will have to consider that much of the AMI deployed as part of the first wave has not reached
the end of its useful life (e.g., approximately 2025).

Although this could pose challenges due to the potential for stranded assets, the second wave
of AMI offers an added benefit of having greater interoperability than the first wave, potentially
outweighing the downside of replacing assets prematurely. For example, although the first

Smart Grid System Report 2020 | Page 56

 Department of Energy |January 2022

wave used Zigbee, ss the second wave could support open communication protocols [e.g., Wi-Fi,
Wi-SUN mesh, or Narrowband Internet of Things (NB-IoT)] to fully enable interoperability of
these technologies.

Utilities face other challenges with AMI implementation, irrespective of whether the
deployments are first or second wave. For example, regulatory commissions in multiple states
have rejected utility AMI proposals in recent years due to concerns over the investment’s cost-
effectiveness and a lack of metrics to measure the investment’s success clearly. Separately,
because AMI introduces potentially hundreds of thousands or millions of access points to
intercept consumer data, 35 how to bolster cybersecurity to prevent attackers from targeting
the data, network, or physical devices is an ongoing priority.

4. DISTRIBUTED ENERGY RESOURCE MANAGEMENT SYSTEM

A distributed energy resource management system (DERMS) is a software application that

increases an operator’s real-time visibility into DER status and allows for the controls necessary
to integrate and optimize DERs in support of grid operating objectives. DERMS technology is
still maturing and being piloted by several utilities. A core DERMS function is to manage
aggregations of DER, forecast their capability, and communicate with other DER
aggregators.36,37 Figure 36 shows the interactions of a DERMS with utilities, aggregators, and
DER.

Zigbee is a suite of high-level communications protocols, based on standard IEEE 802.15.4, used to create
ss

personal area networks with small, low-power digital radios.

Smart Grid System Report 2020 | Page 57

 Department of Energy |January 2022

FIGURE 36. DERMS INTERACTIONS

Source: J. Cook, K. Ardani, E. O’Shaughnessy, B. Smith, & R. Margolis, National Renewable Energy Laboratory

Although 23 utility-led efforts exploring DER aggregation were launched in the United States by
late 2018, DERMS remains in the nascent stages of implementation, with many utilities still in
the process of exploring or piloting the range of available commercial solutions.38 The DERMS
market in 2020 is estimated to be between $69 million to $85 million and to grow to between
$110 million and $160 million by 2024.39

Many initial pilots and demonstrations are focusing on a subset of possible DERMS functions
(e.g., transactive energy for behind-the-meter DER). For instance, Southern California Edison is
using a DERMS to control electric vehicles (EVs), batteries, and solar PV to respond to real-time
market price signals. The project will test the concept of extending security-constrained
economic dispatch, tt a longstanding feature of the bulk electric system, to the distribution
system level. Funded in part by a DOE grant, the three-year project aims to create an
interoperable, distributed control architecture. 40 Similarly, Arizona Public Service is using a
DERMS to reduce peak demand and shift load using a portfolio of customer and utility DER
devices.

Given the heightened focus on DERMS in response to growing DER penetrations, the industry
has developed a draft standard, IEEE P2030.11, that defines DERMS functional specifications to
better facilitate grid services from microgrids and DER. It is expected to enter the balloting
phase of standards development in late 2020 or early 2021.

According to DOE, security-constrained economic dispatch is an area-wide optimization process designed to

tt

meet electricity demand at the lowest cost, given the operational and reliability limitations of the area’s
generation fleet and transmission system.

Smart Grid System Report 2020 | Page 58

 Department of Energy |January 2022

Additionally, IEEE 2030.5 standardizes DER communications with DERMS, while IEEE 2030.7 (the
Standard for the Specification of Microgrid Controllers) helps standardize microgrid operational
communications. Together, these standards begin to form end-to-end interoperability for
microgrids and groups of DER.

C. Customer Systems
Electricity consumers and aggregators form the third major component of grid modernization
investment, deploying EMS for homes, office buildings, and manufacturing facilities. Over time,
these resources will become integrated into the broader electric system in a coordinated
manner. By 2018, the investment level in these systems had increased significantly; sales of EVs
also continued to grow. The combined total of spending for industrial, building, and home EMS
had reached $12.5 billion, while related energy control device spending was $2.5 billion.
Commercial aggregators of demand and supply services among nearly 151 million electricity
consumers accounted for $7 billion in revenue in 2018.uu Estimates for renewable energy
spending in 2018 reached $23.5 billion. Together, these investments amounted to more than
$53.5 billion. Additionally, consumers purchased nearly $19.9 billion of electric cars vv, and
businesses spent as much as $8 billion in commercial and industrial light- and heavy-duty
electric trucks in 2018. Including the values of EV shipments, the larger portrait of nationwide
smart grid investments approached $86.2 billion, of which only about $12.8 billion was spent by
utilities. 41

Customers—spanning commercial, industrial, and residential classes—are increasingly

interacting with the electric grid. Although historically utilities treated customers only as
consumers of energy, the growing adoption of DERs and smart grid technologies has enabled
customers actively to manage both energy consumption and production. Traditional devices in
the home, such as water heaters or thermostats, are now incorporating computational and
networking capabilities for integration with control systems. Newer technology such as EV
chargers and energy storage provide flexible resource options with relatively large energy and
capacity.

Like utilities, customers might adopt EMS (albeit much more limited in scope and capabilities
compared to transmission or distribution EMS) to monitor and control these devices, optimizing
the performance of their building or home to minimize bills and deliver grid services. Given the
range of technologies that could be present at a customer site (e.g., solar photovoltaic, energy
storage, EVs, smart appliances) and a greater ability to respond to utility instructions or price
signals, many utilities are in the process of, or have already completed, deploying AMI to
customer sites.

AMI not only enables utilities to collect customer usage and production data on a fixed-interval
basis (e.g., every 15 minutes), but also allows the utility to communicate directly with

uu
Aggregation systems include demand resource management systems (DRMS) and DERMS.
vv
Electric cars include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).

Smart Grid System Report 2020 | Page 59

 Department of Energy |January 2022

customers to send operating instructions (e.g., as part of a utility demand response program).
These enhanced capabilities allow customers to provide utilities with valuable flexibility to
manage an increasingly distributed and dynamic electric grid. Figure 37 depicts how many of
these smart devices and energy resources are networked through communications and are
controllable through a residential customer EMS.

FIGURE 37. CUSTOMER SMART GRID TECHNOLOGIES

Source: J Veras et al 42

The following sections describe how customer smart grid technologies are rapidly evolving in
the areas of microgrids, EV charging infrastructure, and grid-interactive buildings.

1. MICROGRIDS
A growing focus area in the industry, particularly due to an increased emphasis on the need for
enhanced reliability and resilience, is on microgrids. Microgrids leverage smart grid
technologies and DERs to create small, localized power grids capable of operating
independently of the distribution system (i.e., islanding). Utilities and third parties can own and
operate microgrids, and although most are implemented to specifically provide reliability and
resilience benefits, they also might be leveraged to provide other grid services. ww

As of August 2020, the United States has 237 operational microgrids with a total capacity of
2.4 GW, as shown in Figure 38. Military and educational installations represent the bulk of
active microgrids, but interest is growing from other customer segments. More communities—
such as Borrego Springs, California 43—have either deployed or are investigating microgrids as

ww
“Grid services” refers to a variety of operations beyond generation and transmission required to maintain grid
stability and security. These services generally include frequency control, spinning reserves and operating reserves.

Smart Grid System Report 2020 | Page 60

 Department of Energy |January 2022

an innovative solution to provide resilience benefits by preserving electricity service to critical

facilities or entire communities.

FIGURE 38. MICROGRID CAPACITY AT OPERATIONAL SITES

Source: ICF

For example, in the aftermath of the widespread and prolonged power outages in Puerto Rico
following Hurricane Maria, the Puerto Rico Electric Power Authority (PREPA), in its 2019
integrated resource plan, emphasized the importance of minigrids and microgrids to preserve
reliability for critical loads and to enhance resilience. 44 In August 2020, the Puerto Rico Energy
Bureau (PREB) issued an order to PREPA to “directly incorporate promotion of microgrid
resources into all of its transmission, distribution, and resource planning,” noting that
microgrids “form a critical part of the resiliency solutions envisioned” for Puerto Rico.45 PREB
accepted the minigrid concept as a mechanism to provide resilience during the loss of
transmission or distribution system operations due to severe weather events and decided to
open a minigrid optimization proceeding to further explore the costs, benefits, and alternative
configurations, starting with the San Juan/Bayamón region.

Combined heat and power (CHP) and non-CHP carbon fuels are the most prevalent fuel sources
for active microgrids, but many also include a degree of storage or solar photovoltaic. xx
Figure 39 illustrates that while most the of the Northeast and California account for a majority
of active microgrids, only nine states have no active microgrid.

xx
According to U.S. EPA, CHP is an energy efficient technology that generates electricity and captures the heat that
would otherwise be wasted to provide useful thermal energy—such as steam or hot water—that can be used for
space heating, cooling, domestic hot water, and industrial processes.

Smart Grid System Report 2020 | Page 61

 Department of Energy |January 2022

FIGURE 39. U.S. MICROGRID OPERATIONAL INSTALLATIONS BY APPLICATION 46

Source: ICF

Microgrids require advanced controls that dynamically operate smart grid technologies and
DERs to meet local energy needs. Given the ability for a microgrid to island from the broader
power system, the centralized control system controls local load and generation resources on a
sub-second basis.

One example of a technology provider helping deliver these real-time operational capabilities is
PxiSE. Figure 40 illustrates how PxiSE’s software-based controller continuously balances
generation and load within the microgrid by leveraging data from PMUs located throughout the
microgrid. PxiSE used its PMU-based algorithm to create a microgrid for Sempra Energy’s
downtown San Diego office, controlling EV chargers, solar panels, and batteries. The
optimization algorithm for this microgrid enabled a 20 percent reduction in the building’s
energy bill, which PxiSE has found consistent with other similar microgrids it has implemented.

Smart Grid System Report 2020 | Page 62

 Department of Energy |January 2022

FIGURE 40. A MICROGRID OPERATING SYSTEM 47

Source: Lee, IEEE Spectrum

Given the early stage of microgrid deployment, significant effort has been made to develop
interoperability standards for microgrids (see Table 6 below). More experience with microgrid
deployment will help the industry further refine these standards to ensure microgrid
interoperability.

TABLE 6. MICROGRID INTEROPERABILITY STANDARDS

Standard Description
IEEE P2030.10 Draft standard for direct current microgrids for rural and remote applications
IEEE P2030.12 Draft guide for protection of microgrid systems
IEEE 1547.4-2011 Islanded systems (microgrid) design, operation, and integration guide
IEEE 2030.7 Standard for the specification of microgrid controllers

Despite the growing interest in microgrids, barriers remain for increased microgrid deployment.
First, project economics can be challenging for most customers where a reliable electric grid
reduces the value of back-up power. Second, rules and processes regarding interconnection to
the grid (e.g., standby rates, exit fees) require clear definition or streamlining. Third, integrated
tools are needed to plan and design microgrids for optimizing operations around multiple

Smart Grid System Report 2020 | Page 63

 Department of Energy |January 2022

objectives and, potentially, multiple owners. Finally, methodologies are still emerging to
compensate microgrids for the resilience and other grid benefits they provide. 48

In addition to these challenges, regulatory considerations affect microgrid design and adoption.
For nonutility microgrids, consideration must be given to deriving a legal definition for
microgrids, establishing interconnection requirements and standards, clarifying franchise
requirements to interconnect and lay wires across facilities connected to the microgrid, and
developing owner licensing and registration requirements that enable microgrids to provide
grid services. Separately, whether utilities can own microgrids and how tariff structures and
energy market design will affect microgrid cost-effectiveness are critical considerations.

2. ELECTRIC VEHICLES AND CHARGING INFRASTRUCTURE

EVs represent another emerging technology, with projections for total U.S. EV adoption by 2030
ranging from approximately 1.5 million to 6 million, as shown in Figure 41. 49 This prospective EV
growth, including the electrification of bus fleets and commercial and industrial vehicles, will
introduce both challenges and opportunities for the grid. Challenges include that higher
numbers of EVs charging at the same time could cause spikes in electricity demand, potentially
creating operational concerns for specific sections of the grid if total demand exceeds the
system’s capacity. Adding to this challenge is the difficulty of forecasting both when and where
EVs will charge given their mobile nature and a growing number of options for charging.

A key enabler of greater EV deployment is accessibility to charging stations. EV charging

stations can be public (e.g., workplace, shopping centers, highway service areas) or private
(e.g., at a residence), with the former experiencing significant investment from private
companies offering the charging infrastructure. As of June 2020, the United States has nearly
26,000 public charging stations with over 82,000 charging outlets and over 3,000 private
charging stations with over 13,000 charging outlets. 50

Smart Grid System Report 2020 | Page 64

 Department of Energy |January 2022

FIGURE 41. ANNUAL EV SALES FORECAST (2018–2030)

Source: EEI, Electric Vehicle Sales and Forecast and the Charging Infrastructure Required Through 2030

Technological improvements in EVs and charging infrastructure are also driving further
deployment of EVs. With respect to EV technology, long-range EVs made up 66 percent of the
total EV fleet in 2019 versus only 14 percent in 2014. yy,51 The increasing capacity of EVs is
helping alleviate what many refer to as “range anxiety,” or the concern of drivers that limited
driving range prevents them from adopting an EV. Separately, advances in charging
infrastructure are enabling EVs to charge a much larger amount of electricity in the same—or
even lower—amount of time. For example, Level 1 chargers generally provide around 5 miles of
range for every hour of charging while Level 2 chargers can provide up to 25 miles of range.
Direct current (DC) fast chargers can provide up to 160 miles of range for every hour of
charging. 52 As of September 2020, the United States had 1,457 Level 1 chargers, 71,033 Level 2
chargers, and 15,778 DC fast chargers accessible to the public. 53 In April 2018, DOE announced
funding support for twelve new cost-shared research projects focused on batteries and vehicle
electrification technologies to enable extreme fast charging. Selected research projects are
focused on developing EV systems that can recharge rapidly at high power levels, decreasing
typical charge times to 15 minutes or less using a connector or wireless fast charging system.

As EV penetration increases to represent a much larger share of on-road vehicles, utilities will
need tools to manage the potential grid impacts (e.g., thermal, voltage) from EV charging

yy
Other EV categories include short-range EVs (battery capacity below 50 kWh) and PHEVs.

Smart Grid System Report 2020 | Page 65

 Department of Energy |January 2022

effectively. One strategy—managed charging—refers to a utility’s ability to either indirectly or

directly influence EV charging behavior, and at its root represents a technology, customer, and
business model challenge. For indirect managed charging, some utilities are exploring, or have
implemented, EV-specific time-of-use rates to encourage charging during off-peak hours.
Alternatively, direct management of EV charging would require utilities or third parties to have
the ability to start, stop, or throttle EV charging. While many utility efforts to date in this area
have focused on indirect-managed charging due to challenges with direct control for EVs
(e.g., residential owners not wanting to cede control of their vehicle charging; requirements for
networked charging stations), interest among utilities to pilot and demonstrate direct load
control methods is increasing. 54

EV-managed charging offers utilities a range of benefits, including integration of lower-cost

energy supply, provision of various grid services (e.g., demand response), and economic returns
to both EV owners and the broader utility customer base. In addition, the batteries present in
EVs can provide energy back to the grid when needed, for example, to meet peak electricity
demand or supply power during emergencies. To unlock this full value potential, utilities must
address multiple challenges. For example, utilities must continue educating customers on
managed charging to make more acceptable. Separately, utilities need to enhance network
communications and equipment interoperability to enable the real-time exchange of data and
information needed to manage EV charging effectively.

Although no industry-wide standard currently governs all communications within the EV

ecosystem, it continues to be a major focus area for utilities, electric vehicle supply equipment
(EVSE) vendors, and other relevant parties. Figure 42 shows control and communication
interfaces among utility control centers, network service providers (NSP), EVSE vendors, and
other home smart devices. The figure notes standard communication protocols and physical
components (e.g., SAE J1772 plug) associated with the various interfaces. The IEEE Standards
Association is considering standard development for a “Guide for Electric Transportation Fast
Charging Station Management System Functional Specification” (IEEE P2030.13). zz Additionally,
the Smart Electric Power Alliance, with support from the National Institute of Standards and
Technology (NIST), is developing an EV-managed charging interoperability profile that draws
from existing standards to allow EV fleet managers to provide grid services. 55

One case study that highlights progress in utility-managed charging is the PG&E smart charging
pilot. In partnership with BMW, PG&E tested four vehicle grid integration (VGI) use cases. 56
Performance requirements for demand response were met for 90 percent of events called (209
in total). EV availability was a challenge, however, as the EVs contributed an average of only 20
percent of the need and stationary batteries contributed the remaining 80 percent. Because 60
percent of participants were enrolled under PG&E’s Time of Use rate that incentivized charging
after 11 p.m., few EVs were available when most demand response events were called.

zz
A Project Authorization Request (PAR), the document triggering standards development, was submitted to the
IEEE Standards Association NesCom, the committee that approves new standards.

Smart Grid System Report 2020 | Page 66

 Department of Energy |January 2022

Despite these challenges, PG&E estimates that by 2030 EVs could provide as much as 77.6 MW
of load relief as part of an individual demand response event.

FIGURE 42. EV CHARGING NETWORK ARCHITECTURE

Source: Siemens

3. GRID-INTERACTIVE EFFICIENT BUILDINGS AND CONNECTED COMMUNITIES

Electric customers are no longer assumed to have inelastic demand for electricity. Through
behavioral and technology-enabled changes, customers are in the early stages of deploying
devices and systems to serve their own energy needs while simultaneously providing grid
services to utilities. At the center of these emerging customer capabilities is a set of smart grid
technologies (e.g., smart thermostats, controllable water heaters, smart lighting, smart
sensors), DERs (e.g., rooftop solar, energy storage, EVs and charging equipment), and control
technologies (e.g., home and building management systems).

Grid-interactive efficient buildings (GEB) is an evolving technical capability that permits a

growing segment of customers to integrate their homes and commercial and industrial
buildings into grid operations as a flexible resource, as depicted in Figure 43. DOE defines a GEB
as “an energy-efficient building that uses smart technologies and on-site DERs to provide
demand flexibility while co-optimizing for energy cost, grid services, and occupant needs and
preferences, in a continuous and integrated way.” 57 Given that approximately 75 percent of
electricity generation is used in buildings, this segment of electric grid is significant for achieving
smart grid objectives.

Smart Grid System Report 2020 | Page 67

 Department of Energy |January 2022

FIGURE 43. EXAMPLE OF A GRID-INTERACTIVE EFFICIENT BUILDING 58

Source: Navigant

GEBs can provide a range of demand management services to support grid operations,
spanning dispatchable supply (e.g., solar, storage) and demand (EV charging, Heating,
Ventilation, and Air Conditioning system) on a sub-second basis to providing services on a day-
ahead or seasonal basis, as shown in Figure 44. GEBs can apply these various capabilities—
including combinations of multiple supply and demand resources—to change their net load and
meet a variety of customer and grid needs.

In one effort to test the capabilities of GEBs, Portland General Electric’s (PGE) Smart Grid Test
Bed is actively exploring how the utility can target three neighborhoods to use energy from new
technologies, programs, and products while simultaneously allowing customers to maintain
control over their comfort and delivering clean, reliable, and affordable energy. 59 By coupling
customer programs (e.g., peak time rebates and incentives for battery adoption) with upgrades
to existing feeders and substations, PGE hopes to improve reliability and service quality.

Smart Grid System Report 2020 | Page 68

 Department of Energy |January 2022

FIGURE 44. TYPES OF GEB DEMAND MANAGEMENT

Source: DOE, Grid-Interactive Efficient Buildings Technical Report Series, 2019

Given the relatively promising experience of utilities in integrating GEBs into system operations,
work is ongoing to validate the capabilities of GEB-enabling technologies. One of the most
prominent efforts to research and test these enabling technologiesaaa is Pecan Street’s
innovation test bed.60 Launched in 2009 and comprising over 1,100 homes and business,
250 solar homes, and 65 EVs, this research network can measure energy generation at the
circuit level and usage at intervals ranging from one second to one minute. Pecan Street’s lab
allows for developing, testing, and validating various consumer electronics and applications,
including building controls, vehicle charging, and disaggregation technologies. The data Pecan
Street collects through its test bed provides critical insights into how customers are using,
generating, and storing energy.

aaa
Pecan Street’s innovation test bed also focuses on water and transportation technologies.

Smart Grid System Report 2020 | Page 69

 Department of Energy |January 2022

Another related effort features a partnership among Xcel Energy, Panasonic, Denver
International Airport, and the National Renewable Energy Laboratory (NREL) to design the Peña
Station NEXT zero-energy campus in Denver. 61

As part of this transit-oriented project, researchers paired building, vehicle, and grid modeling
tools to analyze how the campus interacts with the power grid and to identify potential energy-
saving opportunities. Separately, NREL’s campus is serving as a test bed for EV smart charging,
spanning charging technology validation and demonstration, managed charging in accordance
with building loads, and managed charging integrated with multiple commercial buildings. 62

While individual GEBs can provide value to the grid, utilities are also actively exploring
opportunities to coordinate control of multiple GEBs within a single community to provide
more targeted grid value. One example is Alabama Power’s Smart Neighborhood initiative
(Reynolds Landing),63 which comprises a community of homes that are 35 percent more
efficient than the average home being built today in Alabama. Through this effort, Alabama
Power is integrating these homes, their energy efficient systems, appliances, and connected
devices, and a microgrid on a community-wide scale, representing the first such effort in the
Southeast. Through the microgrid’s intelligent technology, Alabama Power can communicate
with the smart homes to determine the optimal way to provide energy.

One of the biggest challenges the Alabama Power project is exploring is how to account for the
fact that homes (and GEBs more broadly) are not owned by the utility and, therefore, primarily
not a grid asset that the utility can control. For instance, most homeowners chose to use only
manual settings for the thermostats, despite having received one-on-one assistance on how to
set programmable controls. Separately, the project also identified how standardizing data from
IoT devices would ease integration efforts among different equipment manufacturer
interfaces. bbb Figure 45 illustrates additional challenges utilities must address to unlock the full
value potential of these emerging grid resources.

bbb
An application programming interface (API) is a computing interface that defines interactions between multiple
software intermediaries. It defines the kinds of calls or requests that can be made, how to make them, the data
formats that should be used, the conventions to follow, etc.

Smart Grid System Report 2020 | Page 70

 Department of Energy |January 2022

FIGURE 45. GEB ADOPTION AND INTEGRATION CHALLENGES 64

Commercialization Optimization, Cyber, Measurement &

and Deployment and Interoperability Verification, Equity

Device timing
Customer acceptance Static descriptive
(updates,
and adoption information
timestamping)

Value proposition Unique functionality,

Data fields collected
and alignment semantics

Delivery of enabling
Communications Performance metrics
devices

Business model Multiple objectives Racial and

innovation and operating modes socioeconomic equity

Smart Grid System Report 2020 | Page 71

 Department of Energy |January 2022

Section Endnotes

1
EIA, Major utilities continue to increase spending on US electric distribution systems, 2018,
https://www.eia.gov/todayinenergy/detail.php?id=36675.
2
EIA, Investment in electricity transmission infrastructure shows steady increase, 2018,
https://www.eia.gov/todayinenergy/detail.php?id=34892.
3
EIA, Form EIA-861, 2019ER, https://www.eia.gov/electricity/data/eia861/.
4
U.S. DOE, Dynamic Line Rating: Report to Congress, June 2019,
https://www.energy.gov/sites/prod/files/2019/08/f66/Congressional_DLR_Report_June2019_final_508_0.pdf.
5
Ibid.
6
Ibid.
7
U.S. DOE, Advancement of Synchrophasor Technology, March 2016,
https://www.energy.gov/sites/prod/files/2016/11/f34/2016-03-20%20Sychrophasor%20Report%20-
%20Final%20Version%20%28Report%20Body%20and%20Appendices%29.pdf.
8
North American Syncrophasor Initiative, Synchrophasors and the grid, 2017,
https://www.naspi.org/sites/default/files/reference_documents/naspi_naruc_silverstein_20170714.pdf.
9
SEL, SEL-421 Performance as Both a Protective Relay and Phasor Measurement Unit whitepaper, https://cms-
cdn.selinc.com/assets/Literature/Publications/White%20Papers/421_Performance_20050419.pdf?v=20170218-
000951.
10
NIST, NISTIR 8106, 2014 NIST Assessment of Phasor Measurement Unit Performance,
https://nvlpubs.nist.gov/nistpubs/ir/2016/NIST.IR.8106.pdf.
11
IEEE Conformity Assessment Program (ICAP), https://standards.ieee.org/products-services/icap/certification-
registry/index.html.
12
Image adapted from Siemens, Phasor measurement unit (PMU),
https://new.siemens.com/global/en/products/energy/energy-automation-and-smart-grid/protection-relays-and-
control/general-protection/phasor-measurement-unit-pmu.html.
13
The University of Tennessee Knoxville and Oak Ridge National Laboratory, FNET/GridEye Web DisplayEye Web
Display, http://fnetpublic.utk.edu/frequencymap.html.
14
California Institute for Energy and Environment, Micro-synchrophasors for Distribution Systems, January 2017,
https://arpa-e.energy.gov/sites/default/files/9_OPEN%202012_MPMU_UC-Berkeley.pdf.
15
NASPI, Synchrophasor Monitoring for Distribution Systems: Technical Foundations and Applications, January
2018,
https://www.naspi.org/sites/default/files/reference_documents/naspi_distt_synchrophasor_monitoring_distributi
on_20180109.pdf.
16
Huang, C., Li, F., Zhou, D., et al. Data Quality Issues for Synchrophasor Applications Part I: A Review. J. Mod.
Power Syst. Clean Energy 4, 342–352 (2016), https://doi.org/10.1007/s40565-016-0217-4.
17
Ibid.
18
ISO New England, Cloud-based PMU Data Sharing and Analytics Platform,
https://intra.ece.ucr.edu/~hamed/(2)%20Luo_Presentation_Cloud-
based%20PMU%20Data%20Sharing%20and%20Analytics%20Platform_ISONE.pdf.
19
U.S. Department of Energy, Distribution System Platform (DSPx) Project, Modern Distribution Grid – Volume III:
Decision Guide, 2017, p.8, https://gridarchitecture.pnnl.gov/media/Modern-Distribution-Grid-Volume-III.pdf.
20
OpenEI. Definition: Distribution Management System,
http://en.openei.org/wiki/Definition:Distribution_Management_System.
21
Newton-Evans; North American Distribution Automation Market Assessment and Outlook: 2018–2020; CAPEX
2020 Mid-Year: Outlook for Smart Grid Investment.

Smart Grid System Report 2020 | Page 72

 Department of Energy |January 2022

22
Open Systems International, Advanced Distribution Management Systems,
https://www.osii.com/solutions/products/distribution-management.asp.
23
Analysis provided to DOE by Newton-Evans, 2020.
24
Wilke, Larry and David Hopson, Arizona Public Service Leverages Data for Advanced Distribution Management,
T&D World, August 21, 2018, https://www.tdworld.com/grid-innovations/distribution/article/20971578/arizona-
public-service-leverages-data-for-advanced-distribution-management.
25
Helmer, Tom, The Hidden Data Governance Issues an ADMS Project Brings to Energy Delivery Business Systems,
Energy Central, January 9, 2020, https://energycentral.com/o/udc/hidden-data-governance-issues-adms-project-
brings-energy-delivery-business.
26
Agalgaonkar, Y., et al., ADMS State of the Industry and Gap Analysis, Pacific Northwest National Laboratory,
March 2016, https://www.pnnl.gov/main/publications/external/technical_reports/PNNL-26361.pdf.
27
U.S. DOE, Fault Location, Isolation, and Service Restoration Technologies Reduce Outage Impact and Duration:
Smart Grid Investment Grant Program, December 2014,
https://www.energy.gov/sites/prod/files/2017/08/f35/B5_draft_report-12-18-2014.pdf.
28
U.S. DOE, Distribution Automation (DA) Smart Grid Investment Grant (SGIG) Program Report September 2016.
29
Pacific Gas and Electric Company, Smart Grid Annual Report – 2019,
https://www.pge.com/pge_global/common/pdfs/safety/how-the-system-works/electric-systems/smart-
grid/AnnualReport2019.pdf.
30
Southern California Edison, 2021 General Rate Case – Grid Modernization, Grid Technology, and Energy Storage,
http://www3.sce.com/sscc/law/dis/dbattach5e.nsf/0/BC9BF1FB73919F0A882584660077EDC0/$FILE/SCE02V4P1.p
df.
31
M. Benmalek, Y. Challal, Efficient Multi-Group Key Management Scheme for Secure Communications in AMI
Systems, 2016. https://www.semanticscholar.org/paper/MK-AMI%3A-Efficient-multi-group-key-management-
scheme-Benmalek-Challal/91e9eb3f890714cf885790679d3fd0dc51da9763.
32
Cooper, Adam, and Mike Shuster, Electric Company Smart Meter Deployments: Foundation for a Smart Grid
(2019 Update), The Edison Foundation: Institute for Electric Innovation, December 2019.
https://www.edisonfoundation.net/-/media/Files/IEI/publications/IEI_Smart-Meter-Report_2019_FINAL.ashx.
33
U.S. DOE, VOICES of Experience: Leveraging AMI Networks and Data, Office of Electricity, March 2019.
https://www.smartgrid.gov/files/documents/VOEAMI_2019.pdf.
34
Gold, Rachel, Corri Waters, and Dan York, Leveraging Advanced Metering Infrastructure to Save Energy,
American Council for an Energy-Efficient Economy, Report U2001, January 3, 2020.
https://www.aceee.org/sites/default/files/publications/researchreports/u2001.pdf.
35
Halim, Fatemeh, et al., Cyber Security Issues in Smart Meter and Their Solutions, International Journal of
Computer Science and Network Security, Vol 18 No. 3, March 2018,
http://paper.ijcsns.org/07_book/201803/20180314.pdf.
36
U.S. Department of Energy, Distribution System Platform (DSPx) Project, Modern Distribution Grid – Volume III:
Decision Guide, 2017, p.7, https://gridarchitecture.pnnl.gov/media/Modern-Distribution-Grid-Volume-III.pdf.
37
Electric Power Research Institute, Common Functions for DER Group Management, Third Edition, Product ID
3002008215, ehttps://www.epri.com/#/pages/product/3002008215/.
38
NREL, Expanding PV Value: Lessons learned from Utility-led Distributed Energy Resource Aggregation in the
United States, https://www.nrel.gov/docs/fy19osti/71984.pdf.
39
Newton Evans adjustment (7%–9.6% growth) of forecasts from research firms including Navigant, F&S, BCC, and
M&M (15%–18% growth).
40
Southern California Edison, Electric Access System Enhancement (EASE), August 2017, http://gridworks.org/wp-
content/uploads/2017/03/Electric-Access-System-Enhancement-Overview-for-MTS-v4.pdf.
41
Utility data derived from Newton-Evans Studies. Renewables data from AWEA 2018 Report ($12 billion); Solar
Energies Industry Association PV Installation Forecast ($11 billion); Energy Storage Association per Wood

Smart Grid System Report 2020 | Page 73

 Department of Energy |January 2022

Mackenzie report U.S. Energy Storage market Q4 208 ($500 million); Electricity Consumer data developed from
U.S. estimates of electric vehicles sold ($19.9 billion)—calculated by average cost ($55,600), source: (Cox
Automotive Reports) × number of units sold (359,000-per EV VOLUMES); Industrial, Building, and Home EMS
($13 billion), source: Grandview Research report, https://www.grandviewresearch.com/industry-analysis/us-
energy-management-systems-ems-market/request/rs6; Estimates for Smart Controls ($7 billion)
Heavy truck sales (250,000 units), source: https://www.statista.com/statistics/245369/class-8-truck-sales-by-
manfuacturer/ and https://fred.stlouisfed.org/series/HTRUCKSSAAR, calculating average value at $170,000 (per
unit) × 1% of total heavy truck sales in 2018 = $850 million. Microgrid investments not included.
42
Jaclason M. Veras, et al., A Multi-Objective Demand Response Optimization Model for Scheduling Loading in a
Home Energy Management System, https://www.researchgate.net/publication/327851208_A_Multi-
Objective_Demand_Response_Optimization_Model_for_Scheduling_Loads_in_a_Home_Energy_Management_Sys
tem.
43
California Energy Commission, Borrego Springs: California’s First Renewable Energy-Based Community Microgrid,
CEC-500-2019-013, February 2019, https://ww2.energy.ca.gov/2019publications/CEC-500-2019-013/CEC-500-
2019-013.pdf.
44
Siemens Industry, Puerto Rico Integrated Resource Plan 2018–2019, Siemens PTI Report Number: RPT-015-19,
June 7, 2019, https://aeepr.com/es-pr/QuienesSomos/Ley57/Plan%20Integrado%20de%20Recursos/IRP2019%20-
%20Ex%201.00%20-%20Main%20Report%20%20REV2%2006072019.pdf.
45
Government of Puerto Rico Public Service Regulatory Board Puerto Rico Energy Bureau, Case No. CEPR-AP-2018-
0001, https://energia.pr.gov/wp-content/uploads/2020/08/AP20180001-IRP-Final-Resolution-and-Order.pdf.
46
ICF Microgrid Database. Data current through August 31, 2020.
47
Lee, Patrick T., The Software-Defined Power Grid is Here, IEEE Spectrum, June 23, 2020,
https://spectrum.ieee.org/energy/the-smarter-grid/the-softwaredefined-power-grid-is-here.
48
California Public Utilities Commission, Decision Adopting Short-Term Actions to Accelerate Microgrid Deployment
and Related Resiliency Solutions, Rulemaking 19-09-009, June 11, 2020,
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M339/K938/339938260.pdf.
49
EEI, IEI, Electric Vehicle Sales Forecast and the Charging Infrastructure Required Through 2030, November, 2018,
https://www.edisonfoundation.net/iei/publications/Documents/IEI_EEI%20EV%20Forecast%20Report_Nov2018.p
df.
50
DOE, Alternatives Fuels Data Center, https://afdc.energy.gov/stations/states.
51
Fleetcarma, EV Growing Pains.
52
Chargepoint, Driver’s Checklist: A Quick Guide to Fast Charging,
https://www.chargepoint.com/files/Quick_Guide_to_Fast_Charging.pdf.
53
DOE , Alternative Fuels Data Center, https://afdc.energy.gov/stations/states.
54
Smart Electric Power Alliance, A Comprehensive Guide to Electric Vehicle Managed Charging, May 2019,
https://sepapower.org/resource/a-comprehensive-guide-to-electric-vehicle-managed-charging/.
55
Smart Electric Power Alliance, Interoperability Profile Task Force, IPTF – EV Fleet Managed Charging
Interoperability Profile Reference Information, https://sepapower.org/iptf-ev-fleet-managed-charging-
interoperability-profile-reference-information/.
56
Pacific Gas & Electric, BMW i ChargeForward: PG&E’s Electric Vehicle Smart Charging Pilot, October 12, 2017,
https://efiling.energy.ca.gov/GetDocument.aspx?tn=221489.
57
DOE, GEB Webinar Series, DER Integration https://www.energy.gov/sites/prod/files/2020/07/f76/bto-geb-
webinar-der-integration-070120.pdf.
58
Ibid.
59
Portland General Electric, Smart Grid Test Bed, https://www.portlandgeneral.com/our-company/energy-
strategy/smart-grid/smart-grid-test-bed.
60
Pecan Street. https://www.pecanstreet.org/.

Smart Grid System Report 2020 | Page 74

 Department of Energy |January 2022

61
NREL, Electric Vehicle Smart Charging at Scale. Available online at:
https://www.nrel.gov/transportation/managed-electric-vehicle-charging.html.
62
NREL, Site-Integrated Electric Vehicle Charging. Available online at:
https://www.nrel.gov/transportation/workplace-electric-vehicle-charging.html.
63
Alabama Power, Reynolds Landing. https://www.smartneighbor.com/pages/reynolds-landing.
64
U.S. DOE, GEB Webinar Series: DER Integration, Building Technologies Office, June 30, 2020,
https://www.energy.gov/sites/prod/files/2020/07/f76/bto-geb-webinar-der-integration-070120.pdf.

Smart Grid System Report 2020 | Page 75

 Department of Energy |January 2022

V. Challenges
The grid evolution underway is driving a new set of challenges for system planners, operators,
regulators, and policymakers. Table 7 provides a list of emerging needs that ongoing and future
research and development (R&D) efforts will seek to address.

TABLE 7. EMERGING NEEDS FOR R&D EFFORTS

Need Effort

Energy storage • Technology advancements (i.e., long-duration, low cost)

• Technology transfer (from R&D to commercialization)
• System integration
• Valuation and policy
• Manufacturing and supply chain

DER • Grid support capabilities (e.g., smart inverters)

• Grid management and coordination
• Resilience support

Sensors • Low cost, precise, high-fidelity, high speed, accurate sensing

technology

Cybersecurity and supply chain • Industrial control system security

security • Internet of Things (IoT) security
• Secure use of global positioning system services
• Highly secure, resilient, communication architecture
• Critical component supply chain security

Advanced grid management • Advanced computing systems and analytics (e.g., fast simulation)
software • Advanced energy management systems (transmission, distribution)
• Building energy management systems
• Coupling convergent infrastructures
• Predictive fault analysis / predictive maintenance
• Threat pattern analysis and fast response
• Flexible transmission system

Advanced planning tools and • Multiscale and multi-objective modeling

approaches • Integrated planning approaches across generation, transmission,
distribution, and customer/third-party systems
• Granular distributed energy resource (DER) forecasting tools
• Scenario analysis tools
• Inclusion of resilience as an objective

Data analytics and visualization • Advanced visualization

• Augmented reality (e.g., emergency response or system maintenance)
• Data mining and analytics

Smart Grid System Report 2020 | Page 76

 Department of Energy |January 2022

Need Effort

Standardization and
• Distributed energy management systems
interoperability
• Microgrid controllers

Workforce • Current workforce skills

• Pipeline of future workers
• Inclusion and diversity

Markets and business models • DER integration into wholesale markets (architecture, coordination,
etc.)
• Transactive energy exchange
• Grid codes defining the respective roles and responsibilities of all
entities, and data and information sharing requirements.
• Coordination frameworks

Policy and regulatory • Policy support to overcome investment issues related to COVID-19 or
to use electric grid investments as one mechanism for economic
recovery
• Coordinated policy/regulatory decision on grid planning and operations
and market design

A. Coordination
Renewable generation, energy storage, and a growing proliferation of DERs are creating an
energy resource mix more diverse and distributed than ever before. Included is diversity in
ownership, as customers and third-party merchants begin to share in the provision of grid
services. This shift in resources is blurring the lines between the traditional transmission,
distribution, and customer domains in nearly every aspect—from regulation to markets to long-
term planning to minute-by-minute operational control. The evolution to a more decentralized
grid will result in perhaps millions of endpoints—many not owned by system operators—and
shift the challenge of direct control to a combination of coordination and control. 1

Coordination is required to implement the appropriate mix of control schemes and market
mechanisms effectively so that a vastly more complex grid can be operated reliably. Greater
coordination is required in multiple forms including operational coordination between
transmission system operators (TSOs), distribution system operators (DSOs), and DER
owners/operators, as well as regulatory coordination between federal (e.g., Federal Energy
Regulatory Commission (FERC)) and state regulators and utilities. Additionally, this heightened
level of interconnectedness between entities will require new rules related to cybersecurity
(see Section V.E).

The entities participating in the various aspects of grid management can be numerous. To
illustrate, Figure 46 provides an industry structure diagram showing all participants and their

Smart Grid System Report 2020 | Page 77

 Department of Energy |January 2022

respective relationships in the region the Electric Reliability Council of Texas (ERCOT) manages.
Within ERCOT are 32 discrete entities. The various lines of coordination represent relationships
associated with market interactions, state regulation, retail sales activities, the provision of
energy and ancillary services, and various control mechanisms. Note the number of participants
owning or controlling DERs that can provide services to both the transmission and distribution
system levels. Understanding the industry structure within a state or region and the respective
roles and responsibilities of all participants is the first step in determining data and information
flow, computing, communication, and control requirements serving that area.

FIGURE 46. ERCOT INDUSTRY STRUCTURE

Source: J. Taft, PNNL

Widespread DER adoption and the growing potential for them to provide services across the
transmission-distribution (T-D) interface are leading grid planners and operators around the
world to evaluate the respective roles and responsibilities of various system actors and the
system requirements needed to enable greater coordination. Actually, multiple major
interfaces need to be considered due to operational coordination among the TSO, DSO, and
DER owners/operators (including aggregators).

Grid architecture offers a framework for planners to determine the roles and responsibilities,
interfaces, and interactions among key actors necessary to achieve the objectives for a smart
grid and enable T-D coordination. Two main actors are at the heart of T-D coordination—the

Smart Grid System Report 2020 | Page 78

 Department of Energy |January 2022

TSO and the DSO. ccc Customers and merchants (e.g., DER aggregators and technology service
providers), however, also play a pivotal role in effectuating a selected coordination approach.
Two bookend models are relevant to system structure and the allocation of roles and
responsibilities: the Total TSO model, in which the TSO performs all DER operational
coordination, and the Total DSO model, in which the DSO performs all DER operational
coordination. Between these two models is a spectrum of potential Hybrid DSO models with
varying allocations of roles and responsibilities between the TSO and DSO.2

FIGURE 47. CONCEPTUAL ILLUSTRATION OF T-D COORDINATION MODELS 3

Source: P. De Martini, L. Kristov, & J. Taft, Operational Coordination across the Bulk-Power, Distribution, and
Customer Systems

In addition to defining the types of coordination between the TSO and DSO, Figure 47
demonstrates these conceptual models also capture the types of interfaces and interactions the
TSO and DSO will have with DER aggregators and individual DER owners/customers. Table 8
provides an overview and examples of the four interaction types these parties might have with
in a Hybrid DSO approach, which is the predominant approach currently in place in North
America.

TABLE 8. ELECTRIC GRID INTERACTION TYPES

Interaction Type Examples

Power flows: The physical movement of • Bulk power system generators inject power onto the transmission
electricity over equipment (e.g., wires, system
substations) • DERs provide power to offset customer load or inject it into the
distribution system
Operational control: The ability to • Distribution operator reconfigures a circuit due to emerging
direct, manage, or regulate the physical system constraints
operation (e.g., power output) of energy • DER aggregator controls constituent resources to meet an
resources and grid facilities obligation (e.g., wholesale market participation)

Although the term distribution operator (DO) can be used to refer to the operator of the distribution system, it
ccc

has a more limited set of functional capabilities with respect to DER coordination than a DSO.

Smart Grid System Report 2020 | Page 79

 Department of Energy |January 2022

Interaction Type Examples

Market transaction: All forms of market
arrangements (e.g., power purchase
• Resources participating in the wholesale market submit
agreement; participation in a spot
bids/offers to the wholesale market operator
market) to purchase or sell energy,
• Utility procures energy directly from resources to meet customer
capacity, and grid services; the
load
opportunity to service both the
• Distribution system markets could form to procure non-wires
transmission system and the
solutions
distribution system requires
coordination
Information/data exchange: Provision • Wholesale market participants submit telemetry to the ISO/RTO
or receipt of information or data to validate real-time performance
needed to preserve the system’s safe • Distribution or transmission operator sends information to DER
and reliable operation and support the aggregators and individual DERs about emerging system
other three types of interactions conditions that affect DER operation

Grid architecture is inextricably linked to the smart grid. Determining the interface types
between different actors will allow for identification of the required observability,
communications, and control capabilities to support those interfaces. For example, Figure 47
illustrates the system structure will affect whether a DER aggregator needs to coordinate with
only the TSO (i.e., Total TSO), only the DSO (i.e., Total DSO), or both the TSO and DSO (i.e.,
Hybrid DSO).

Using a set of grid architecture principles (see Table 9 below) allows for a deeper analysis of
alternative system structures and determination of how smart grid technologies can help
address these principles. One principle—observability—is a common theme of smart grid
development. The roles and responsibilities allocated to different actors, like the TSO and DSO,
will determine the level of observability (e.g., grid sensing and asset monitoring) each requires
to fulfill their unique roles and responsibilities. For example, in a more decentralized model
where the DSO takes on greater responsibility for DER operational control, that the DSO would
require greater distribution system and DER observability than the TSO is likely.

TABLE 9. SUMMARY OF GRID ARCHITECTURE PRINCIPLES 4

Principle Description
Observability The level of operational visibility of the distribution network and its interconnected DER.
Greater observability allows for more effective grid management and can help validate
planning models. Observability should be maximized.
Scalability Ability of the system’s operational coordination processes and supporting technologies to
function effectively with significant quantities of DERs on the system. Scalability should be
maximized.
Cybersecurity Coordination frameworks can affect the level of cybersecurity vulnerability by virtue of
vulnerability how many distinct interactions the framework requires. Cybersecurity vulnerability should
be minimized.

Smart Grid System Report 2020 | Page 80

 Department of Energy |January 2022

Principle Description
Tier bypassing Creation of an information/data exchange that skips a tier of the physical power system
hierarchy (e.g., DER aggregator bidding directly into wholesale markets without informing
the distribution operator). This may create operational or reliability problems. Tier
bypassing should be avoided.
Hidden coupling Two or more entities operating separately according to their own goals and constraints
and without effective coordination, but seeking to control the same resource
(e.g., conflicting signals for DER operation from the ISO/RTO and distribution utility).
Hidden coupling should be avoided.
Latency cascading Potential for information/data flows to span timeframes longer than that required for
operational purposes due to the cascading of elements through which the data must flow.
Latency cascading should be minimized.
Layered Entails breaking down large-scale optimization problems multiple times into subproblems
decomposition that work in combination to solve the original problem. Can be used as a basis for
comparing alternative grid architectures.

Another principle of significant relevance to smart grid development is scalability, or the ability
of grid processes and technologies to operate significant quantities of DERs effectively. T-D
coordination models should seek to maximize the capability to scale up with the number of
endpoints on the system. Although system operator management systems (e.g., energy
management systems (EMS), distributed energy resource management systems (DERMS)) have
significantly advanced, further development in both management systems and computing
capabilities is likely needed to enable the TSO or DSO to effectively coordinate the actions of a
vastly larger number of endpoint devices in alignment with grid needs.

The potentially significant increase in the number of endpoint devices and unique interfaces
between actors also will require attention to another principle—cybersecurity vulnerability. A
carefully crafted coordination model can minimize the number of interfaces between the grid
and external participants such as DER owners/operators and reduce the vulnerability of the grid
to malicious cyber intrusion. As described more fully in Section V.E, cybersecurity is a growing
focus area, and determining each party’s roles and responsibilities is critical to help bolster the
grid’s cybersecurity.

B. Integrated Planning
Modernizing the electric grid entails considering a wide range of existing and future needs in
the context of rapidly evolving technology. As discussed in this report, the complexity of the
electric grid, particularly at the distribution system level, is increasing as efforts are underway
to integrate and use myriad DER, including microgrids, to improve reliability, resilience, and
efficiency capabilities. This increased complexity is not occurring uniformly or consistently
across the United States; it is driven largely by state-level policies and incentives.

Smart Grid System Report 2020 | Page 81

 Department of Energy |January 2022

Figure 48 depicts the various stages of evolution of a distribution system grid due to the
complexity presented by distributed energy resources, the evolving ownership of grid assets,
and the formation of new markets for DER services. Moving through the various levels of
operational sophistication, depicted as stages in Figure 48, will require the advancement of grid
capabilities. Most utilities are at Stage 1, but some are moving into Stage 2 because more DERs,
particularly photovoltaic installations, are being integrated into their systems. In Stage 2,
distribution system operators will need to address bidirectional power flow and implement
capabilities to manage voltage and thermal loading, often using new equipment and
operational practices. Stage 3 will require the operation of distribution systems that can
effectively observe and control DERs under a wide variety of grid configurations and ownership
models and full coordination with the TSO and DER owners/operators. To implement this
evolution, planning processes will need to be established to ascertain the appropriate pace and
scale of system improvements by formulating and implementing effective grid modernization
strategies.

FIGURE 48. DISTRIBUTION GRID EVOLUTION COMPLEXITY 5

Source: P. De Martini, Newport Consulting. DOE, Draft Modern Distribution Grid (DSPx) - Strategy and
Implementation Planning Guidebook, Volume IV

Grid modernization planning approaches and supporting analytical tools are evolving. state
legislators and regulators often move quickly to target specific technologies, such as energy
storage, without first formulating holistic, grid modernization strategies based on clear policy
objectives. Also, it is worth noting that the ability to deploy more advanced capabilities (e.g.,
associated with Stage 2 and Stage 3 operations) is contingent on having more fundamental
capabilities in place. As depicted in Figure 49, managing assets in a way that ensures the
reliability and resilience of the electric grid is essential to supporting operations that are more
advanced. In addition, priorities regarding the protection of critical infrastructure and services,
including the application of alternative grid configurations (such as minigrids or microgrids),

Smart Grid System Report 2020 | Page 82

 Department of Energy |January 2022

also will influence grid modernization strategies and where and how smart grid technology
should be deployed.

FIGURE 49. DISTRIBUTION SYSTEM INVESTMENT PYRAMID 6

Source: DOE, Draft Modern Distribution Grid (DSPx) - Strategy and Implementation Planning Guidebook,
Volume IV

Figure 50 provides a high-level view of an integrated planning process and shows the
relationship of grid modernization planning at the distribution system level within the larger
framework. As noted in this report, the coupling of integrated resource, integrated distribution,
and transmission planning processes is in an early stage of evolution because the advent of
DERs and whole-system planning for improving grid resilience are fairly recent developments
and are driving greater coordination between these typically disparate processes. In addition,
key components of the process are being formulated and not readily available to system
planners and regulators, such as the probabilistic forecasting of DER adoption and load at
sufficiently granular levels, the undertaking of system analysis to examine options, and the
incorporation of resilience considerations into the planning process. For example, methods that
undertake threat-based risk assessments with prioritization of structural resilience options are
not sufficiently undertaken for integration into current utility planning processes.

The challenges for doing so include technological advancements in methods and tools
development and institutional acceptance and application of evolving methods by decision
makers. Resilience planning may include a wide range of stakeholders including federal and
state officials and regional planners.

Smart Grid System Report 2020 | Page 83

 Department of Energy |January 2022

FIGURE 50. INTEGRATED PLANNING PROCESS 7

Source: DOE, Draft Modern Distribution Grid (DSPx) - Strategy and Implementation Planning Guidebook,
Volume IV

The U.S. Department of Energy has worked closely with both state regulators and utilities over
the past several years to develop a consistent planning framework that can guide grid
modernization (i.e., smart grid) investments. ddd Figure 51 shows the planning process that has
resulted from this collaborative effort. It begins with the formulation of a holistic grid
modernization strategy and roadmap that can then guide the development of more detailed
technology implementation plan. Key steps include:

• Formulating clear objectives and guidelines that articulate what is required by when.

• Undertaking a functional analysis to determine what planning and operational

requirements are needed over time. Figure 52 shows functional requirements
associated with planning, grid operations, and market operations capabilities.

• Undertaking a structural analysis to ensure architectural principles, such as

coordination, scalability, observability, and flexibility, are considered in the system
design.

ddd
The DOE effort is called the Next-Generation Distribution System Platform (DSPx) Initiative. Written materials
developed through the DSPx effort are available at https://gridarchitecture.pnnl.gov/modern-grid-distribution-
project.aspx. DSPx Volume 4 (Strategy and Implementation Guidebook) is undergoing DOE review.

Smart Grid System Report 2020 | Page 84

 Department of Energy |January 2022

• Developing a strategic planning roadmap that integrates the functional and structural
analysis requirements with the objectives.

• Developing implementation plans that incorporate more detailed engineering analysis

with selection of technology. All proposed investments should then be able to provide
an investment logic, phased proportionally over time, that clearly maps back to the
original planning objectives.
The Department discovered that regulators and utilities often jump to technology selections
before developing more holistic and rigorous grid modernization strategies. Although
regulators and utilities across the country have begun adopting these concepts, more outreach
is required.

FIGURE 51. GRID MODERNIZATION STRATEGY AND IMPLEMENTATION PROCESS

Source: DOE, Draft Modern Distribution Grid (DSPx) - Strategy and Implementation Planning Guidebook,
Volume IV

Smart Grid System Report 2020 | Page 85

 Department of Energy |January 2022

FIGURE 52. PLANNING AND OPERATIONAL CAPABILITIES REQUIRED FOR A FLEXIBLE AND RESILIENT
DISTRIBUTION SYSTEM 8

Source: DOE, Draft Modern Distribution Grid (DSPx) - Strategy and Implementation Planning Guidebook, Volume IV

C. Energy Justice
There is a growing concern regarding the equitable provision of benefits resulting from the
implementation of smart grid technology. The President’s Executive Order 14008 highlights
energy justice eee as a key grid modernization consideration. Therefore, we must consider how
smart grid deployments will support reliable, clean, affordable, and safe electricity delivery for
underserved and disadvantaged communities.

Furthermore, given the convergence between the energy and information/communication

technologies sectors, smart grids are becoming socio-technical systems permitting the
interaction between technologies, institutions, and social development. fff This suggests that

eee
The concept of energy justice, which is rooted in environmental and climate justice research, is “focused on
equity issues in the processes of energy production, delivery, consumption, and system transition.” From Justice
Implications of Clean Energy Policies and Programs in the United States: A Theoretical and Empirical Exploration, by
Zhou and Noonan, Sustainability, Volume 11, Issue 3, February 3, 2019. Available at: https://www.mdpi.com/2071-
1050/11/3/807/htm
fff
For further discussion, see Energy Justice and Smart Grid Systems: Evidence from the Netherlands and the United
Kingdom, by C. Milchram et al., Applied Energy: 229, September 2018. Available at:
https://reader.elsevier.com/reader/sd/pii/S0306261918312091?token=F817C7CAB9F00201044EBFA0B88DA0EBB
15B789433174B5868D4E7ACF4ED7A96933501DEBCAEE1D8E9984829E61D554E

Smart Grid System Report 2020 | Page 86

 Department of Energy |January 2022

“social value” becomes a design driver for smart grid implementation in addition to technical-
economic aspects. Addressing energy justice will require:

• Equitable distribution of benefits, burdens, or costs, and responsibilities among

stakeholders of a given energy system.
• Equitable access to and participation in decision-making processes shaping the design
objectives and outcomes of energy systems.
• Education to gain an equitable appreciation of stakeholder groups within energy
systems.

D. Research, Development, and Demonstration Needs

Having dedicated research, development, and demonstration (RD&D) activities to continue
enhancing the smart grid technological capabilities is critical to meet evolving electric system
needs. Smart grid RD&D has been a key focus area of DOE which has led and coordinated grid
modernization efforts across the country. These efforts were given a significant boost with the
passage of Title XIII of the Energy Independence and Security Act of 2007 (EISA). Subsequently,
through the American Recovery and Reinvestment Act (ARRA) of 2009, DOE received
$3.4 billion to invest in 99 Smart Grid Investment Grant (SGIG) projects with the objectives of
modernizing the grid, enhancing cybersecurity, improving interoperability, and reporting on the
performance of smart grid technology. 9 This was augmented with an additional $700 million to
fund the Smart Grid Regional and Energy Storage Demonstration program which supported 32
projects.ggg The combined effort applied over $9 billion in government and private-sector funds
over a five-year period.

In addition to program funding, DOE has continued to advance smart grid RD&D activities
through its Grid Modernization Initiative (GMI), Grid Modernization Laboratory Consortium
(GMLC), and Advanced Research Projects Agency-Energy (ARPA-E) to create next-generation
smart systems, including devices, software, tools, and techniques. 10 The success of these
DOE-led RD&D efforts depends on the ability to coordinate with others, including federal
agencies, electric utilities, equipment manufacturers, regional, state, and local governments,
National Laboratories, universities, and research organizations. Figure 53 shows active research
areas within DOE and how these areas tie to grid technologies. Underlying the successful
application of grid technologies are the overarching technical requirements of observability,
controllability, and interoperability.

ggg
For more information, including project details, on the Department’s Smart Grid ARRA efforts:
https://www.energy.gov/oe/information-center/recovery-act

Smart Grid System Report 2020 | Page 87

 Department of Energy |January 2022

FIGURE 53. RELATONSHIP BETWEEN R&D THEMES, GRID TECHNOLOGIES, AND UNDERLYING
TECHNICAL REQUIREMENTS

Source: Adapted from G. Bindewald, DOE, AG R&D

As these smart grid RD&D efforts continue, a focus on many of the key topics covered earlier in
this report will be needed, such as grid hardware (e.g., power electronics), sensors,
communications, controls, energy storage, and modeling approaches. In addition, integrated
demonstrations within utility environments will be needed to affect the adoption of smart grid
capabilities. Table 10 describes the changing needs for a modern power system and lists RD&D
needs across generation, transmission, distribution, and customer systems. Although significant
progress has already been made to deploy smart grid systems, fully enabling the evolution to a
smart, decentralized, and resilient electricity grid requires ongoing RD&D to deploy even more
advanced systems.

Smart Grid System Report 2020 | Page 88

 Department of Energy |January 2022

TABLE 10. SMART GRID R&D NEEDS

Electric Characteristics
RD&D Needs
Systems Traditional Modern
Generation • Centralized • Centralized and distributed • Integrated system planning tools
• Dispatchable • More stochastic • Energy storage
• Large thermal plants • Efficient and flexible units • Control coordination with advanced
• Mechanically coupled • Electronically coupled automatic generation control (AGC)
• Flexible thermal generators
• Synfuel development
• Nuclear innovation
Transmission • Supervisory control and data • High fidelity, time- • Multiterminal high-voltage direct
acquisition for status visibility synchronized measurements current (HVDC)
(sampling, not high definition) • Increased breadth and depth • Low-cost power flow controller
• Operator-based controls in visibility technologies
(primarily load following and • Automatic controls • Next-generation energy management
balancing) • Flexible network to relieve systems (AEMS)
• Congestion, despite capacity constraints • Drones/UAS for HV line inspections
underutilized capacity (limited • Threats and risks defined and • Integrated system planning tools
flow control) appropriately managed • Security – physical and cyber
• Threats/vulnerabilities not well • Secure redundant time synchronization
defined • Low-cost bulk energy storage
• Transmission weather sensors
• Dynamic line rating
• Superconductors
Distribution • Limited visibility • Enhanced observability • Cybersecurity
• Limited controllability • Increased communications • Microgrid controllers
• Radial design (one-way flow) and controls • DERMS
• Increasing fault currents and • Local, autonomous • Advanced Distribution Management
voltage issues stressing system coordination System
• Aging assets (unknown effects) • Two-way flow • Resilient survivable communication
• Self-healing networks
• Active asset condition • Distribution line and asset sensors
monitoring • Decentralized control architectures
• Solid-state transformers
• Smart voltage regulation
• Smart inverters
• Communication planning tools
• Community energy storage
• Analytics usage with Artificial
Intelligence (AI
Customers • Uniformly high reliability, but • Customer-driven reliability • Single-customer microgrids
insensitive to upstream issues and power quality • Building energy management systems
• Energy consumers (kWh) • Energy producers • Security – physical and cyber
• Predictable behavior based on • Variable behavior and • Transactive controls
historical needs and weather technology adoption patterns • Behind-the-meter storage
• Interconnection without • Plug-and-play functionality • Low-cost energy-related sensors
integration • Informed on system • Grid-interactive efficient buildings
• Growing intolerance to conditions (e.g., outages, • Secure grid-edge to IoT connectivity
sustained outages hosting capacity)
• Data access (e.g., energy
usage)

Smart Grid System Report 2020 | Page 89

 Department of Energy |January 2022

Several RD&D focus areas cut across transmission, distribution, and customer domains. These
areas include power electronic hardware, sensors, communications, controls, and energy
storage. The following subsections expand on Table 10 to describe RD&D needs for each of
these areas in greater detail.

1. POWER ELECTRONICS HARDWARE

DOE has defined power electronics (PE) as “the broad set of technologies (e.g., materials,
components, subsystems, and systems) necessary for the control and conversion of
electricity.” 11 A power electronic system (PES) is “a self-contained, fully functional collection of
hardware and software that safely and efficiently converts current-type (e.g., AC to DC, DC to
AC), voltage (e.g., DC to DC), frequency (e.g., AC to AC), or any combination thereof, and
conditions electric power according to application-specific requirements”, as shown in
Figure 54. Advancing PE technology is critical for enabling the integration and control of
asynchronous power sources (e.g., wind and photovoltaic electricity generators) and DERs
within a dynamic grid operations environment.

In general, a hierarchy of materials, components, and subsystems comprise a system, such as a

PES. Power stage (i.e., responsible for physical manipulation of currents and voltage), control
and protection, and thermal management are the three interdependent subsystems critical for
a PES to operate safely and reliably.

FIGURE 54. HIERARCHY OF PE RESEARCH AND DEVELOPMENT 12

SYSTEM Power Electronic System

SUBSYSTEMS Power Stage Control & Protection Thermal Management

Module, Converter &

Switching Logic
Controllers, Interfaces & Packaging,
Semiconductor Devices,
COMPONENTS Capacitors, Inductors & Current & Voltage Sensors. Passive Elements,
Transformers Contactors, Circuit Breakers Active Elements
& Fuses,
Auxiliary Power Supplies

MATERIALS Semiconductors, Magnetics, Dielectrics & Conductors

Source: DOE, Power Electronics Strategy, 2020

Smart Grid System Report 2020 | Page 90

 Department of Energy |January 2022

PESs are deployed across electric power systems with 30 percent of electric power passing
through a form of PES today, but this percentage is expected to increase to 80 percent by 2030.
Consumer-centric processes, including adoption of electric vehicles (EVs) and other DERs, are a
significant driver of increased PES deployment. Figure 55 illustrates the types of PE deployed
across generation, transmission, distribution, and customer systems.

FIGURE 55 POWER ELECTRONIC SYSTEMS THROUGHOUT THE ELECTRIC POWER SYSTEM 13

Source: DOE, Power Electronics Strategy, 2020

Although a range of technologies can be termed a PES (e.g., inverters, converters, motor
drivers), the specific application of each typically results in a unique design. A PES can be
defined in terms of its attributes, including power density, efficiency, weight, cost, and
reliability. Because a PES cannot optimize all these attributes simultaneously, however, the
application will inform which gets prioritized. Separately, PES capabilities can be reflected in
terms of power rating, voltage rating, and switching frequency. Figure 56 represents a three-
dimensional representation of the PES design space to illustrate the complex and interrelated
tradeoffs present between a PES’s physical parameters.

Smart Grid System Report 2020 | Page 91

 Department of Energy |January 2022

FIGURE 56. PES DESIGN SPACE FOR VARIOUS APPLICATIONS 14

Electric Vehicles

100M
Home Appliances

PV Inverter (grid scale)

LED Drivers
1M
Frequency (Hz)

10K
Wind Power (grid scale)

100
Industrial Drive
0 Electric Energy Storage
0

FACTS Devices 0
10K
100K

1M 10B

High Voltage DC Transmission

Source: DOE, Power Electronics Strategy, 2020

One example of an emerging application of PE is the increasing deployment of smart inverters,

which form a key interface between energy resources and the grid. Although traditional
inverters serve the primary purpose of converting direct current into alternating current, smart
inverters offer an expanded set of capabilities and functions to provide distribution system
voltage and frequency support, bulk power system reliability support, and interoperability. The
Institute for Electronic and Electrical Engineers (IEEE) 1547-2018 standard 15 defines
requirements specifically for smart inverters, but industry participants are still working through
the best approaches to implement it. To guide the continued adoption of these technologies,
states will need to consider (1) if smart inverters will provide grid stability services, (2) whether
provision of grid stability services is mandatory and if the smart inverter will receive
compensation for such services, and (3) if updates are needed to relevant policies, codes, and
standards to capture the unique attributes of smart inverters.

With respect to further advancement of PE, system-level analyses have identified opportunities
for RD&D to help close existing gaps. Although not a comprehensive list, DOE has identified the
following areas as critical for PE RD&D and accelerating the adoption of this technology:

• The provision of technical assistance to regulators and utilities in the application of PE

technology, including smart inverters. Such technical assistance would include providing

Smart Grid System Report 2020 | Page 92

 Department of Energy |January 2022

education, developing guidelines, and demonstrating the application of these

technologies.

• Advancement of common circuit topologies or system architectures that apply PE

technology for integrating customer systems, electric vehicles, solar photovoltaic
systems, and energy storage devices with the electric grid.

• Development of improved solid-state materials suitable for extreme application

environments (e.g., high-power density and high-voltage grid applications).

• Advancements in fundamental materials (e.g., magnetics, dielectrics) and their

incorporation into electrical equipment (e.g., transformers, capacitors).

• Improvements to thermal management, packaging, and reliability of solid-state

components for high-current (e.g., greater than 100 ampere) devices and modules.

• Advancement of components used for system protection, such as DC breakers, which

can work faster and handle more power than existing protection schemes. 16

2. SENSING
Observability is a key issue facing grid operators tasked with managing a more dynamic and
complex electric grid. Traditionally, grid observability is accomplished by monitoring power
flows and voltage conditions only at transmission and distribution substations. Due to the
continued grid evolution discussed in Section IV, and specifically changes to distribution system
topology and operations, grid operators have more endpoints and varying conditions to
monitor. DERs on the distribution system and the resulting changes to power flows can impact
system voltage, control system operation, and asset utilization. At the same time, this shift in
grid dynamics requires observing these additional grid conditions at faster timescales and with
greater spatial resolution. Better visibility into the state of the grid and the ambient conditions
that affect the grid requires developing advanced sensors and deploying them at scale.

The increasing number of grid conditions requiring observation, collectively referred to as the
extended grid state and shown in Figure 57, includes an expansion of parameters beyond the
traditional power and voltage conditions to include a range of mechanical, thermal, chemical,
ambient, and system status information across the full range of grid assets. Substation power
transformers, for instance, are costly and critical assets that require a combination of onboard
dissolved gas analysis (i.e., chemical monitoring) and measurements of oil temperature to
precisely determine asset health in near real time. Observing and acting on transformer asset
health information helps protect system reliability and resiliency. Additionally, a diverse mix of
DERs requires observability of conditions such as energy storage capabilities (e.g., battery state-
of-charge) and aggregate distributed PV output (e.g., estimation based on ambient monitoring).
Sensor data informs operations across transmission and distribution jurisdictions, allowing grid
operators to manage key power system parameters, asset health, and system performance.

Smart Grid System Report 2020 | Page 93

 FIGURE 57. EXTENDED GRID STATE TAXONOMY

Source: J. Taft, E. Stewart, Z. Li, Extended Grid State Definition Document

Smart Grid System Report 2020 | Page 94

Department of Energy |January 2022
 Department of Energy |January 2022

Sensors, which comprise the four core elements shown in Figure 58, currently are used
primarily for localized applications and often are not fully integrated. Of these elements,
powering sensors and establishing robust communications pose persistent challenges due to
the remote geographic and harsh environmental conditions often associated with sensor
deployments. These challenges, including the maintenance implications and significant upfront
costs of sensors, have limited their use to niche applications rather than more widespread
adoption that would provide a holistic view of grid state. The four core sensor elements shown
in Figure 58, however, are increasingly converging to achieve fully integrated sensing or
measurement systems.

FIGURE 58: FOUR CORE ELEMENTS OF AN INTEGRATED SENSOR

Physical transducer: Computational device:

Converts measured phyiscal Converts the electrical signal
parameter (measurand) to an from the transducer to digital
electrical signal for processing. information (typically a
microprocessor or
microcontroller).

Sensor
Elements
Communication device: Power supply or system:
Transmits the information Provides power to various
over a wired or wireless elements of the sensor device.
network to a location for
enabling data analytics and,
ultimately, decision-making.

Sensing technology has several gaps, but R&D can help utilities enhance the level of sensing to
support the future grid. To address these gaps and enable timely diagnosis, prediction, and
prescription of system variables during normal and extreme event conditions, R&D efforts
should focus on improving the cost and performance capabilities of sensors and the systems
they support. DOE has identified a variety of areas where targeted RD&D could help close
existing gaps in sensing technology capabilities, including:

• Develop robust, low-cost, multiparameter sensors that can be ubiquitously applied to

monitor the health, performance, and state of grid assets and the ambient environment.
Such sensors should measure a variety of physical, electrical, and chemical parameters
and be applied to improve grid reliability, the observability of distributed assets, and
system protection.
• Pursue research and development to advance materials needed to improve the
robustness and functional range of sensors.
• Develop platforms to enable the integration of multiple sensor types for a range of
applications.

Smart Grid System Report 2020 | Page 95

 Department of Energy |January 2022

• Explore opportunities for improving the reliability, speed, accuracy, and cost of phasor
measurement units for distribution-level applications.
• Pursue new sensing technologies required for emerging grid components, such as
power electronics-based, solid-state transformers.
• Develop sensor technology with onboard data assimilation, analytics, and distributed
intelligence to reduce the requirement for information flow and enable automatic
functions.

3. DATA MANAGEMENT AND ANALYTICS

Sensor deployment throughout the electric grid has provided utilities with large amounts of
data. This increasingly requires improved data management and analytics techniques to turn
these data into actionable information for grid operators. Data analytics, on the other hand, is
the science of analyzing raw data to draw conclusions useful for meeting organizational
objectives. Data management practices treat data as valuable assets to unlock their potential
for an organization. hhh

Considering the case of customer Advanced Metering Infrastructure (AMI) data, a utility could
collect 15-minute or hourly data for millions of customers and amass years’ worth of these
records. Each record could contain multiple data points such as voltage level, real power, and
reactive power. Although this vast amount of data poses integrity, storage, and analytics
challenges, utilities are finding ways to use this information for operational applications such
locating a distribution system problem (e.g., tree on power line) or for advanced planning
analytics associated with targeting energy efficiency and demand side management programs
or improving asset management.iii In an application using more advanced sensor data, utilities
have used high-resolution voltage and current data at the distribution substation level, coupled
with pattern-matching software analysis, to effectively detect incipient faults before they lead
to equipment failure and cause customer outages. jjj

The required timescale for sensing, transferring, and analyzing grid data depends on the
application. Real-time analytics for protection and control, for instance, require very low
latency (i.e., millisecond to subsecond) data sensing and processing, while transaction analytics
for market operations requires historical data at a higher latency (i.e., minutes to days).
Figure 59 depicts a range of acceptable data latencies for different grid applications.

hhh
Managing data effectively requires having a data strategy and reliable methods to access, integrate, cleanse,
govern, store, and prepare data for analytics.
iii
DOE, Advanced Metering Infrastructure and Customer Systems, Results from the Smart Grid Investment Grant
Program, September 2016, available at:
https://www.energy.gov/sites/prod/files/2016/12/f34/AMI%20Summary%20Report_09-26-16.pdf
jjj
Mid-South Synergy Electric Cooperative, Texas A&M, Mid-South Synergy Uses DFA Technology to Avoid Outage
and to Reduce Wildfire Risk, February 2017, available at: http://powersolutionsllc.us/wp-
content/uploads/2017/02/201701.MidSouth.BrokenInsulatorAndCharredCrossarm.pdf

Smart Grid System Report 2020 | Page 96

 Department of Energy |January 2022

FIGURE 59: ILLUSTRATION OF VARYING DATA LATENCIES

Source: J. Taft, Pacific Northwest National Laboratory

As utilities collect and house data from an increasing number of distinct endpoints, the need to
drive data standardization to integrate data across multiple types of sensor platforms will
increase, clearing the pathway for applying advanced analytical methods. For example, because
sensors might not be located at the direct source of an event, utilities need to develop and
implement analytical methods that derive meaningful results from a more limited dataset.

The utility sector has lagged in adopting data management techniques due to three gaps: cost
justification, workforce education, and standardization. Additionally, integrating data analytics
with utility systems requires simplifying human-machine interfaces and developing visualization
tools. Moving forward, utilities will need to share and adopt best practices for data acquisition,
distribution, sharing, and exchange, all while mitigating cybersecurity risks and ensuring
customer privacy.

Unlocking the full potential of these new and enhanced data requires targeted RD&D to
advance data analytics capabilities for utilities in the following areas:

• Implement standardized data management protocols to ensure interoperability of data

formats and collection methods. Such protocols should be compatible with large,
disparate datasets and include an increasingly distributed set of endpoints.

Smart Grid System Report 2020 | Page 97

 Department of Energy |January 2022

• Develop and apply methods for data monitoring, cleansing, and utilization that support
the incorporation of data into utility models and systems within required timeframes.
These methods should support a range of applications that enable the integration of
data from both new and existing sensors.
• Pursue, through demonstrations, the application of multimodal and multivariate
machine learning techniques to support real-time and predictive analysis of a wide
range of grid conditions.
• Develop simplified human-machine interfaces with advanced data management and
analytical tools.
• Target development and application of analytical methods that enable the coupling of
sensors of varying types (e.g., mechanical, radio frequency, optical, electrical) and time
synchronization to accomplish the desired objectives of operating a modern electric
power system (e.g., resilience, wildfire mitigation).
• Develop a program and an information sharing platform to identify utility analytics
challenges; connect utilities with researchers at national labs and academia; and share
outcomes with the broader utility industry.

4. GRID CONTROL
The increasing number of renewable and distributed energy resources is fundamentally
changing traditional approaches for managing key power system parameters (i.e., voltage,
frequency, current, and power flow) and for balancing the supply and demand of electricity.
Approaches for maintaining strict control over these parameters and ensuring a balanced
system require the development and application of more sophisticated, digital control schemes
with the ability to undertake actions involving more endpoints within faster and more dynamic
timeframes.

Traditionally, supplying sufficient electric power to meet load is accomplished by dispatching

power plants or taking them offline, depending on whether power demand is increasing or
decreasing, respectively. Finer control is accomplished by regulating the speed at which
generators at power plants rotate, as measured by changes in system frequency (which is kept
tightly at 60 hertz, or cycles per second). kkk The rotating mass of these generators is largely
responsible for maintaining the inertia needed to maintain a constant frequency across the grid
system.

kkk
In large, interconnected power systems, grid operators use centralized AGC systems to continuously (every 4–6
seconds) update the setpoints of generators to regulate power output and frequency.

Smart Grid System Report 2020 | Page 98

 Department of Energy |January 2022

Separately, voltage and reactive power levels are controlled through a variety of devices (e.g.,
transformers and capacitors) that can be set manually or automatically adjusted through
centralized or distributed control systems. lll

As discussed throughout this report, electric grids are experiencing rapid changes in the
generation resource mix with increasing amounts of renewable generation such as wind and
solar photovoltaic (PV) power plants and a plethora of distributed energy resources that can
either contribute energy or modify load within very fast timescales. These variable and
distributed resources are asynchronously connected to the grid, that is, they are not currently
involved in maintaining system inertia through the use of a rotating generator; they are either
completely or partially interfaced with the grid through power electronics devices (inverters).
The power electronics aspects of these generating resources present new opportunities in
terms of grid control and response to abnormal grid conditions. For instance, inverters and
other power electronics devices are expected to provide system stability (e.g., frequency
regulation) as synchronous resources are replaced by asynchronous resources. Significant
effort, however, is required to ensure these resources can provide grid services under both
static and dynamic conditions and can operate in a manner that supports grid reliability, that is,
inverters function to ensure the correct operation of power system parameters under all
conditions.17

Efforts to ensure the appropriate operation of inverter-based resources are ongoing. For
example, as a result of large outages that occurred due to disturbances (fires) that momentarily
disconnected power from large PV resources in the West, NERC formed the Inverter-Based
Resource Performance Task Force (IRPTF) to develop recommended performance specifications
for bulk power system-connected, inverter-based resources during steady-state and dynamic
system conditions. 18 Although numerous utilities participate in the IRPTF, considerable work is
needed to develop control schemes at the distribution system level for DERs. These control
schemes should ensure that DERs are dispatchable, that is, perform when needed, within the
coordination guidelines set up by all participants, and support grid reliability.

In addition to establishing control schemes that can effectively integrate inverter-based

resources into grid operations, grid designers will need to consider the structure of control
systems and the coordination required among the various elements (as discussed above). As
the number of grid-edge devices and new participants that might own them continues to grow,
the ability to scale proportionally, while maintaining effective grid operations, is becoming
increasingly important. Scalability considerations include providing a capability to
accommodate an increasing number of DERs in a way that recognizes both local (or selfish)
interests and system-wide operational requirements—even over short timespans—and
effectively balances the optimization objectives of both.

Note that certain devices also are used to protect power system equipment from rapid events such as equipment
lll

faults and lightning strikes. For example, protective relays can sense faults and initiate a trip, or disconnect, to
undertake 32–128 samples per cycle and digital fault recorders that provide an historical account of an event can
undertake 32–384 samples per cycle.

Smart Grid System Report 2020 | Page 99

 Department of Energy |January 2022

As shown below in Figure 60, the application of a laminar coordination framework that applies
a layered structure is one approach for addressing the scaling and optimization problem as the
number of DERs on the system increases.

FIGURE 60. LAMINAR COORDINATION GRID ARCHITECTURE 19

Source: Adapted by J. Paladino, DOE, from Architectural Basis for Highly Distributed Transactive Power Grids:
Frameworks, Networks, and Grid Codes, by J. Taft

Figure 60 shows an idealized coordination framework depicting three layers: one represents
the distribution system operator, another represents distribution substations, and the lowest
layer represents utility customers (or even a microgrid, which would house additional
sublayers). In this framework, each coordination node is responsible for a set of controls that
optimizes the resources within its domain, essentially the resources below it, and interfaces
with the node above it in a way that meets system objectives (e.g., dispatching needs) and
ensures reliable operations. Designing and testing such control structures will be necessary to
accommodate DERs and enable effective coordination between the bulk power and
distribution systems.
Several areas require additional RD&D to effectively integrate and utilize DERs; they include
testing and demonstrating:

• Control schemes using solid-state devices that can ensure the coordinated dispatching
and management of inverter-based resources with legacy grid systems under a variety
of grid conditions.

Smart Grid System Report 2020 | Page 100

 Department of Energy |January 2022

• Grid architectures that can accommodate scaling while addressing the optimization
problem of balancing local resource objectives with system needs to support both
market and grid operations.
• Hybrid control approaches that recognize the increasingly interdependent nature of
grid applications and market-incentive signals (i.e., economic-engineering control
theory).

5. COMMUNICATION NETWORKS
Operational communications networks represent foundational enabling technology required by
most modern smart grid applications. System operators require robust communication
networks to transfer data collected from various levels of the grid (e.g., transmission,
distribution, or customer). These data often flow into energy management systems and inform
control actions, which also rely on a communications network to carry out.

Traditionally, utility communications were limited to substations and used supervisory control
and data acquisition (SCADA) over dedicated phone line circuits and later were augmented with
point-to-point radio communications. Utilities are increasingly using a wider range of
communication methods and media to fully cover the grid, with a notable trend of extending
network coverage over the vast distribution system. A typical utility network might include a
fiber optic network forming the communications backbone among generation plants and
substations; a point-to-multipoint, low-latency wireless network from substations to critical
field devices (e.g., switches, reclosers); and wireless mesh networks for a very large number of
endpoints (e.g., smart meters) at the neighborhood level.

Figure 61 depicts the tiers of an end-to-end utility network, with the tiers often referred to as a
wide area network (WAN), field area network (FAN), or neighborhood area network (NAN).
Each tier offers services that can be adapted to specific requirements of systems, devices, and
applications such as bandwidth, latency, resilience, and security.

Smart Grid System Report 2020 | Page 101

 Department of Energy |January 2022

FIGURE 61. UTILITY AND CUSTOMER COMMUNICATION NETWORKS 20

Source: DOE, Draft Modern Distribution Grid (DSPx) - Strategy and Implementation Planning Guidebook, Volume IV

Whereas communication network design requirements vary by application, robust and

integrated communications networks are needed across the electric system for automating
outage restoration, managing voltage, and informing operational and planning system models,
among other use cases.

Communications technologies and options are seemingly plentiful, but many current options
fall short of grid operational demands for reliability, resilience, integrity, and availability.
Commercial cellular networks, for instance, can fail as grid electrical power fails, potentially
stranding critical operational data, and the promise of very high bandwidth 5G technology
(24GHz and above) can be blocked by most manmade and natural materials. R&D efforts should
focus on holistic and comprehensive communications planning tools for grid operators, resilient
and survivable communications links for critical data, advanced and redundant timing
mechanisms, and implementation best practices for current technologies. To support
achievement of these attributes, RD&D efforts should focus on the following items:

• Develop communications architectures for a more distributed system that are

scalable, flexible, and efficient, while managing communication latencies and
cybersecurity vulnerability.
• Work with industry to enable optimal spectrum utilization, which will require
addressing challenges associated with network congestion and underutilization, as
well as the optimum scheduling of device communication.
• Work with industry to advance flexible, dynamic, scalable, and compatible
architectures for communications networks, such as OpenFMB (Open Field
Messaging Bus), to ensure connectivity of the grid and grid-edge assets.

Smart Grid System Report 2020 | Page 102

 Department of Energy |January 2022

• Seek to enhance a distributed communications architecture to address emerging

challenges from the Industrial IoT and 5G wireless.
• Develop a strict, clear framework for cybersecurity and privacy implications and
rules for the broad variety of data and data uses to help structure communication
architecture development.
• Quantify network uncertainties and security risks in the context of the modern
electric power system and develop self-healing and more robust network
capabilities to oppose malicious operations.

6. ENERGY STORAGE
Electricity is unique among commodities in that its delivery was developed without a storage
component. Every other resource commodity has the ability to store excess quantities built into
its delivery system, for example, in the form of granaries, warehouses, and reservoirs. This
embedded storage capacity creates a buffer for mismatches between supply and demand,
stabilizing prices and protecting customers.
The lack of embedded storage capacity on the electric grid has ramifications for its design,
operations, and costs. Without a buffer, electric grid operators must maintain a constant
balance in generation (supply) and customer load (demand). To account for unpredictability in
loads, generation, weather, and mechanical outages, operators must maintain significant
amounts of reserve generation that can quickly respond to changing grid conditions and
preserve the balance. It also means that grid components must be sized and built on the basis
of peak demand, resulting in a grid that is larger (and more expensive) than what average load
would require. When contrasted with the natural gas system, which has ubiquitous storage
built into its delivery system, the benefits of embedded storage capacity on the electric grid
become evident.

Demonstrated improvements in the performance and cost of energy storage technology have
fostered greater adoption. In January 2020, DOE announced the Energy Storage Grand
Challenge (ESGC), a comprehensive program to accelerate the development,
commercialization, and utilization of next-generation energy storage technologies and to
sustain U.S. global leadership in energy storage. DOE released a draft ESGC roadmap in July
2020 and requested stakeholder input.21 The ESGC has focused efforts in five key areas:

• Technology Development – to undertake energy storage R&D

• Manufacturing and Supply Chain – to develop strategies to strengthen U.S. leadership

in innovation and manufacturing
• Technology Transition – to ensure that energy storage R&D transitions to markets
through field validation, demonstration projects, public-private partnerships, business
model development, and dissemination of high-quality market data

Smart Grid System Report 2020 | Page 103

 Department of Energy |January 2022

• Policy and Valuation – to provide data, tools, and analysis to support policy and
regulatory decisions
• Workforce Development – to support development of a workforce that can then
research, develop, design, manufacture, and operate energy storage systems

Energy storage, which can provide many different services, as illustrated by Figure 62, has
experienced significant cost declines in recent years. It will require further cost declines,
however, to be more competitive relative to existing technologies. Targeted R&D efforts can
focus on opportunities to continue driving down the technology’s cost, including through the
development of novel materials and system components (e.g., membranes, electrolytes,
interconnects, and the supporting power electronics and power conversion systems). In
addition, because some of the components of energy storage batteries are critical materials
sourced from other countries, finding more suitable replacements and reducing the supply
chain is important (e.g., by avoiding reliance on foreign-sourced materials with limited supply).

FIGURE 62. ILLUSTRATION OF PRELIMINARY ENERGY GRAND CHALLENGE USE CASES 22

Source: DOE, Energy Storage Grand Challenge Roadmap

Also related to enabling lower energy storage costs is the need to improve the technology’s
performance and capabilities (e.g., energy density and roundtrip efficiency). For example,
although many existing storage deployments have durations of four hours or less given the
capabilities of lithium-ion batteries, the growing penetration of intermittent renewables
underscores the need for long-duration (e.g., greater than 12 hours) and seasonal storage to
meet emerging grid needs. Other performance goals the Energy Storage Grand Challenge will
explore include grid forming, power quality, reliability, scalability, and efficiency, among others.
Additionally, R&D efforts can explore opportunities to increase the useful lifetime of energy
storage resources, which as a result will also make them more cost-effective.

Finally, greater understanding and predictability of energy storage system components are
needed, as is fostering confidence in the safety and reliability of the systems.

Smart Grid System Report 2020 | Page 104

 Department of Energy |January 2022

Given minimal levels of operational experience with energy storage to date, fire department
officials, building managers, and other approval authorities need to better understand how to
deploy this technology safely and reliably. Through additional R&D efforts—including the
development of standards (e.g., IEEE, National Fire Protection Association, International
Electrotechnical Commission (IEC), Underwriters Lab (UL))—stakeholders can be more
confident that energy storage is deployed according to safety best practices and performance
test standards while also being able to meet reliability metrics.

The ability to ubiquitously apply energy storage within the grid will profoundly change the way
we deliver and manage electricity. Thoughtfully positioned energy storage systems can address
system challenges such as providing grid flexibility needed to manage increasing levels of
variability in generation and load, back-up power to maintain reliability and resilience, and
storage capacity needed to fuel electric vehicle fleets. Understanding how to apply energy
storage technology will require careful planning supported by more sophisticated modeling
tools. Deploying energy storage technology will involve the use of advanced smart grid
capabilities needed to observe and control the state of the grid and its assets within a highly
dynamic environment.

Smart Grid System Report 2020 | Page 105

 Department of Energy |January 2022

E. Interoperability
Interoperability is the ability to safely, securely, and effectively exchange and use information
among two or more devices and systems. This means the myriad devices and systems deployed
on the grid need to function in coordination under, potentially, a wide variety of operational
situations. In theory, true interoperability would enable the plug-and-play of any device or
system on the grid, that is, the devices and systems would work perfectly when first used or
connected without significant reconfiguration or adjustment by the user (e.g., customer, utility,
or other grid participant). Achieving plug-and-play interoperability for the electric grid,
however, will be a challenging and long-term task. Although significant effort has been
underway for many years to develop and institute standards so emerging devices and systems
can function within the grid operational environment, much additional work is required to
address structural constraints (e.g., managing bidirectional flow of electricity) to allow devices
and systems to readily interoperate in a plug-and-play manner.

As with much of the grid, we have inherited legacy infrastructure from prior decades. Utilities
have built their systems incrementally and have depended largely on customized solutions from
vendors to enhance their capabilities to meet changing requirements. This incremental
approach has resulted in collections of systems within a given utility that were not originally
designed to interoperate; thus, these systems primarily reside within silos that contain
dedicated equipment. Also, these systems often depend on vendor-specific protocols for
communicating and exchanging data. Examples include voltage management systems, outage
management systems, geographic information systems, and customer data management
systems. More recently, the realization of operational and asset management efficiencies
resulting from the sharing of information across these systems, for both planning and
operational purposes, has led to considerable and costly efforts by utilities to integrate them.
Furthermore, the proliferation of DERs has necessitated greater degrees of operational
coordination requiring integrated devices and systems.

Figure 63 provides a conceptual view of the various levels of interoperability. The horizontal
bars represent levels of interoperability maturity ranging from noninteroperable systems
requiring effort- and cost-intensive point-to-point solutions to true plug-and-play operations
that allow direct communication between systems and can be integrated with minimal effort.
Customized point-to-point solutions permit a small set of devices to cooperate but become
untenable as the sole approach to enable interoperability as the number of devices requiring
integration across a wide range of functions increases.

Smart Grid System Report 2020 | Page 106

 Department of Energy |January 2022

As mentioned above, considerable effort continues to be undertaken to apply middleware mmm

that will connect and facilitate cooperation and data sharing among multiple devices and
systems through an enterprise service bus. nnn

FIGURE 63. LEVELS OF INTEROPERABILITY CONCEPTUAL DIAGRAM 23

Source: National Institute of Standards and Technology (NIST), Draft Framework and Roadmap for Smart Grid
Interoperability Standards, Release 4.0

As shown below in Figure 64, utility middleware typically is located within the operations center
where it serves various utility systems and associated applications; it also communicates to
devices through the utilities wide-area network.

mmm
Middleware is software that lies between an operating system and the applications running on it. Middleware
also can serve to connect disparate systems and devices to systems, to enable communication and data
management between them.
nnn
An enterprise service bus used for grid purposes is a communication system that transfers data among systems
and software applications.

Smart Grid System Report 2020 | Page 107

 Department of Energy |January 2022

FIGURE 64. MIDDLEWARE PLATFORM STRUCTURE DETAIL

Source: J. Taft, Pacific Northwest National Laboratory

For instance, a utility DERMS might have a gateway system (middleware) that performs
communication protocol translation between the protocol used by the DER (e.g., through a
controller or inverter) and that of the DERMS; several example configurations are shown in
Figure 65. Middleware in this context provides a logical data management layer but requires
more software (the middleware) that has to be procured, hosted on more servers, configured,
integrated with various applications, maintained, and upgraded. It also adds latency to data
processing, which becomes an issue for certain real-time operations.

Smart Grid System Report 2020 | Page 108

 Department of Energy |January 2022

FIGURE 65. GATEWAY SYSTEM EXAMPLES FOR DER INTEROPERABILITY 24

Source: Adapted by F. Cleveland, IEC 62351 Security Standards for the Power System Information System

As shown in Figure 65, middleware can reside on a server in a data or operations center, at the
field device, or in both locations. Field gateway devices are being developed and deployed that
enable DERs to interface with a variety of communications networks and their protocols. The
middleware model derives from the basic IoT scenario, which assumes field devices are
independent and decoupled, which is not the case for electric power systems where devices
need to cooperate directly. As a result, reliance on middleware might not constitute a complete
solution to the interoperability problem because it does not easily support grid operations,
especially those involving distributed analytics, intelligence, and control—essential features
envisioned for a future, highly decentralized and interactive grid. As an illustration, Figure 66
depicts how middleware can be a structural bottleneck and source of latency when considering
peer-to-peer data flow required for coordinating devices within a highly distributed system.

Smart Grid System Report 2020 | Page 109

 Department of Energy |January 2022

FIGURE 66. MIDDLEWARE CONSTRAINS PEER-TO-PEER COORDINATION

Source: J. Taft, Pacific Northwest National Laboratory

The long-term solution for plug-and-play interoperability will involve building a

sensor/communication platform that can take advantage of modern networking capabilities ooo
and provide multiple connection points for devices and applications. Such a platform combined
with standards and security protocols would allow authorized devices and software access for
data exchange and to communicate with each other in a structured but flexible environment.
As shown in Figure 67, undertaking this approach will take time. It also will be challenging as it
will require a significant structural transformation from the current legacy infrastructure.
Applying a sensor/communication platform can make multiple data flow paths possible and
reduce the need to move all data to any one point first (e.g., to middleware) while making low-
latency pathways possible to support real-time, distributed operations.

ooo
Networking technology can use a publish-subscribe messaging pattern where senders of messages (publishers)
send categorized published messages that subscribers may choose to receive, if relevant.

Smart Grid System Report 2020 | Page 110

 Department of Energy |January 2022

FIGURE 67. SENSOR/COMMUNICATION PLATFORM 25

Source: J. Taft, P. De Martini, Sensing and Measurement Architecture for Grid Modernization

The pathway to enable true grid interoperability will require deploying the following
capabilities:

a) Standardized data formats that can be recognized and used between devices and
systems;
b) A common information model that can be used to develop requirements for control
devices and software applications from different manufacturers or sources so they can
interoperate;
c) Communication protocols that can exchange information with any device according to
latency and payload requirements;
d) Physical hardware, such as standardized physical ports, that enables connectivity;
e) Functional requirements for devices and systems under the expected range of operating
conditions;
f) Rules and standards, supported by testing and certification processes, that are
acknowledged by the industry to enable device and system interoperability; and
g) A system architecture that supports the functional requirements, enables scalability,
and deploys a sensing and communications platform that supports plug-and-play
interoperability.

1. STANDARDS AND NIST EFFORTS CONTRIBUTING TO INTEROPERABILITY

Industry technical standards specify performance for a range of devices and systems in terms of
reliability, fidelity, cybersecurity, and interoperability. They aim to

• Allow for incorporation of future technology, with minimal inconvenience, into existing
systems.

Smart Grid System Report 2020 | Page 111

 Department of Energy |January 2022

• Unify technical practices by publishing precise technology requirements that expert

working groups with members having diverse professional experiences develop.

• Drive performance and interoperability requirements that provide commercial

technology developers with clear performance design requirements.

Smart grid standards bring together several interrelated disciplines to form a framework of grid
devices and systems that speak a common language and operate in concert to achieve grid
objectives. Figure 68 shows key smart grid standards focus areas.

FIGURE 68. SMART GRID STANDARDS FOCUS AREAS

Standards specific to interoperability define performance at device and system interfaces. To

achieve interoperability, they must address unified practices for communication protocols,
information models, and functional specifications for managing voltage, power, and frequency.
The practices must be common for every interface within the system to achieve full
interoperability. Individual standards often address a subset of the necessary interoperability
requirements for a given interface (e.g., DER, DERMS, or Electric Vehicle (EV) charger). Current
standards tend not to adequately specify the complete range of interoperability requirements
for even a single grid asset or function, much less the broad range of assets and services
needed to achieve full interoperability. In the near term, that standards will be able to drive full
interoperability is unlikely due to the diversity of communications protocols ppp and information
models currently in practice.

ppp
A communications protocol is a system of rules that allows two or more entities to transmit information within
a communications system.

Smart Grid System Report 2020 | Page 112

 Department of Energy |January 2022

Even for a particular grid device or system, industry standards often offer multiple routes for
compliance (e.g., several communication protocols) to satisfy a diverse group of stakeholders
contributing to standards development processes. qqq Standards are beneficially narrowing the
interface options (physical and data) and moving in the direction of interoperability, but they
fall short of facilitating seamless integration (e.g., plug-and-play). For example, IEEE 1547-2018
requires application of a unified information model; rrr it allows for the use of three different
DER communication protocols, but gateway devices might be needed to perform protocol
translation.

A secondary issue with standards providing interoperability is that compliance by vendors and
utilities is optional unless required by legislation or regulation, which is only found in a few
cases. sss Optionality for implementing and following standards means that market forces will
continue to play an influential role in consolidating interoperability approaches. A wide range of
stakeholders ttt can persist in advancing interoperability by collaborating on best-practices and
by striving to standardize on a single approach for a given application.

Section 1305 of EISA directs the NIST “to coordinate the development of a framework that
includes protocols and model standards for information management to achieve
interoperability of smart grid devices and systems.” 26 NIST has produced several iterations of its
Framework and Roadmap for Smart Grid Interoperability Standards and has recently issued a
draft fourth version. 27 The current draft describes communications scenarios for various grid
architectures used to guide specific communication and interoperability requirements. The goal
is to explore relationships and associated interoperability needs that expanded
communications to many diverse endpoints will have on four key grid themes: cybersecurity,
operations, economics, and testing and certification requirements. The draft framework
(Version 4.0) reflects a range of ongoing grid changes, including rapid technological
advancements, falling prices of smart grid technologies, increased proliferation of sensors and
network-enabled devices, and the resulting massive amounts of granular data.

To supplement standards development and their revised draft framework and roadmap, NIST is
also developing interoperability profiles to provide a more holistic view of how devices and
systems need to interoperate. The basic set of elements for an interoperability profile include
the asset description and associated physical performance specifications, communication
protocol, and information model. Different devices have unique capabilities that need to be
accurately captured by a profile to enable integration into the grid operations environment.
For example, EVs differ from stationary DER storage devices in several important dimensions,
and an EV interoperability profile would need to account for aspects such as locational

qqq
Standards development organizations operate open working group and balloting processes that require a high
degree of consensus (e.g., 75% approval in balloting) to approve and publish standards.
rrr
IEEE 1547-2018 requires a unified information model. In practice, this is implemented in protocols using the IEC
61850-7-420 common information model.
sss
For instance, the California Public Utilities Commission determined that IEEE 2030.5 communications protocol is
the standard for DER in California with an implementation date of June 22, 2020.
ttt
Parties interested in interoperability include national labs, academia, NGOs, utilities, vendors, third-party DER
operators, and customers.

Smart Grid System Report 2020 | Page 113

 Department of Energy |January 2022

information and constraints on the basis of travel schedules. In addition to EVs, other profiles
that could benefit from further development by NIST include microgrids, DER aggregation,
customer devices, meters, and stationary energy storage.

2. INDUSTRY STANDARDS LANDSCAPE

Figure 69 depicts how standards, policy, markets, and grid codes influence technology. Industry
groups are actively developing standards for smart grid technology that define capabilities and
interfaces. Similarly, policies and markets affect what technology capabilities are needed, which
often are standardized once mature. Grid codes—the technical specifications defining rules for
facilities connected to the power system—influence technology requirements, which often
result in standardization. Over time, standards can ensure the technology meets the minimum
grid code requirements, but the implementation of standards often lags industry needs.

FIGURE 69. INTERACTIONS OF CODES, STANDARDS, MARKETS, AND POLICY ON TECHNOLOGY 28

Source: J. McDowell, A Journey Through Energy Systems Integration: Trending Grid Codes, Standards, and IEC
Collaboration

Technical bodies and their standards development activities relevant to smart grids are listed
below. Individual standards associated with these bodies are discussed in the following
subsections.

• Institute for Electronic and Electrical Engineers (IEEE) – global community of technical
members developing consensus-based standards for engineering, computing, and
information technology often adopted in North America.

• International Electrotechnical Commission (IEC) – organization preparing and

publishing international standards for all electrical, electronic, and related technologies.
Adoption of IEC standards is quite prevalent in Europe, with fewer IEC standards
adopted in the United States.

Smart Grid System Report 2020 | Page 114

 Department of Energy |January 2022

• National Institute of Standards and Technology (NIST) – one of the nation’s oldest
science laboratories, now part of the U.S. Department of Commerce. Smart grid
technology is one of NIST’s focus areas for supporting standards development.

• International Council on Large Electric Systems (CIGRE) – global technical body

focusing on sharing power systems expertise. CIGRE publishes reference papers and
technical bulletins rather than standards documents that can serve as guideposts for
areas of further R&D and standardization. A selection of working groups formed in 2019
and 2020 is included in Appendix VII.C.2.

• North American Electric Reliability Corporation (NERC) – a nonprofit organization that

develops reliability standards and requirements for operating the bulk power system in
the United States and Canada. NERC is developing a cybersecurity standard for the
secure design and operation of modern third-party data storage and analysis systems
(e.g., cloud services), which are growing in popularity as a means to organize and store
significant amounts of new data from smart grid devices. 29 Cybersecurity standards are
described in greater detail in Appendix VII.C.3.

3. IEEE SMART GRID INTEROPERABILITY STANDARDS

IEEE 2030, published in 2011, is a standard that provides alternative smart grid interoperability
approaches and best practices through the smart grid interoperability reference model (SGIRM)
it established.30 IEEE began a process for revising the standard in May 2020 to cover DER
technology and system architecture more fully. Aimed at addressing the growing impact of
DERs on central power generation dispatch and transmission operations, IEEE P2030.11 will
standardize functional specifications for DERMS, an important step for aggregating and
managing DER. uuu The DERMS standard, expected to enter the balloting phase in late 2020 or
early 2021, will facilitate grid services from DERs and microgrids. Although these standards help
facilitate interoperability, their completion will not lead to full interoperability because they do
not define all the features required (e.g., communication protocols, information models).
Table 11 summarizes active and draft standards in the IEEE 2030 series. vvv

uuu
IEEE P2030.11 DERMS functions include discovery and visualization and monitoring of real and reactive power
flows and voltage at specific nodes; DER production estimation and scheduling, and dispatch of real and reactive
power; and DER ancillary services provision, including voltage and frequency control/support.
vvv
IEEE draft standards are denoted by “P” in front of the standard number (e.g., IEEE P2030.11).

Smart Grid System Report 2020 | Page 115

 Department of Energy |January 2022

TABLE 11. SMART GRID INTEROPERABILITY STANDARDS

Standard Description
IEEE 2030-2011 Smart grid interoperability of energy technology and information technology
operation with the electric power system, end-use applications, and loads
IEEE 2030.1.1-2015 Electric vehicle DC fast charger control technical specifications
IEEE 2030.2-2015 Energy storage systems interoperability
IEEE 2030.3-2016 Energy storage systems test procedures
IEEE P2030.4 Draft guide for control and automation components
IEEE 2030.5-2018 Smart energy profile application protocol, one of the three protocols approved by
IEEE 1547
IEEE 2030.6-2016 Demand response benefit evaluation framework
IEEE 2030.7-2017 Microgrid controller specification
IEEE 2030.8-2018 Microgrid controller testing
IEEE 2030.9-2019 Microgrid planning and design practices
IEEE P2030.10 Draft standard for direct current microgrids for rural and remote applications
IEEE P2030.11 Draft guide for DERMS functional specification
IEEE P2030.12 Draft guide for protection of microgrid systems
IEEE P2030.13 Guide for electric transportation fast charging station management system functional
specification

Communication and common information standards are closely related to interoperability

standards. Appendix VII.C.2 contains a discussion and list of these standards.

4. DISTRIBUTED ENERGY RESOURCES AND INVERTER-BASED RESOURCES

The IEEE published an interconnection and interoperability standard for DERs in 2018, paving
the way for smart inverter www availability across the United States. IEEE 1547-2018 specifies
DER requirements for both electrical and communication interfaces to support distribution and
bulk power system (i.e., transmission and generation) needs. 31,xxx The advanced capabilities
enable DERs to help manage local voltage (e.g., volt-var mode) and stay connected during bulk
power system disturbances (e.g., voltage and frequency ride-through). Settings, controls, and
monitoring information are accessible through a communications interface. DER standards

www
Although smart inverters will be a widely used application of IEEE 1547-2018, the standard applies to all DER.
IEEE 1547a-2020 is a targeted amendment to IEEE 1547-2018 creating a wider range of allowable settings for
xxx

DER response to abnormal grid voltage for a specific DER performance category.

Smart Grid System Report 2020 | Page 116

 Department of Energy |January 2022

development efforts are ongoing to address challenges in the areas of energy storage (IEEE
P1547.9), cybersecurity (IEEE P1547.3), and application of IEEE 1547-2018 (IEEE P1547.2).yyy

The UL 1741 certification standard for inverters was updated in late 2020. It relies on the
recently revised IEEE 1547.1-2020 to define detailed test procedures. UL 1741 allows
equipment manufactures to certify smart inverter products, which simplifies interconnections
because the equipment design has been tested and certified by a Nationally Recognized Testing
Laboratory. zzz Figure 70 shows the dependencies of smart inverter availability on upstream
standards and certifications.

FIGURE 70. DER STANDARDS DEVELOPMENT AND IMPLEMENTATION

In addition to equipment availability, utilities need to make implementation decisions

surrounding equipment performance and functionality. State regulators have held stakeholder
workgroups to discuss and order standards implementation in some states. 32 The National
Association of Regulatory Utility Commissions (NARUC) recently approved a resolution
recommending that states convene stakeholder processes to adopt the standard, and more
state regulators might decide to initiate proceedings. 33 The NARUC resolution recommends
aligning implementation of IEEE 1547-2018 with the availability of certified equipment.

In addition, IEEE is drafting a standard for inverter-based resources connecting to the bulk
electric system, such as a large solar plant connecting to a transmission line. This draft standard
(IEEE P2800) is partially in response to NERC investigations into undesirable transmission-
connected PV responses to system disturbances.34 Bulk-power system inverters are expected to
have capabilities similar to those of DER inverters, with some important exceptions. For
instance, IEEE P2800 is considering dynamic voltage support—a key bulk-power system support
function allowed by IEEE 1547 but not defined. Dynamic voltage support is important in the

yyy
Appendix VII.C.2 contains a table describing the active and draft standards in the IEEE 1547 series.
A Nationally Recognized Testing Laboratory (NRTL) is an independent third-part laboratory recognized by the
zzz

U.S. Occupational Safety and Health Administration (OSHA) to test and certify products to applicable product
safety standards.

Smart Grid System Report 2020 | Page 117

 Department of Energy |January 2022

future grid with a lower number of conventional generation sources (e.g., lower inertia, lower
system strength).

5. GRID INTERACTIVE ELECTRIC VEHICLES AND SMART CITY STANDARDS

With the acceleration of transportation electrification, closer coordination is needed between
SAE International (formerly the Society of Automotive Engineers) and IEEE to facilitate
integration of electric vehicle and charger technology with the electric power system.
Well-planned EV integration manages grid impacts and associated costs by coordinating EV
charging and standardizing grid support capabilities within EV charging equipment. Similar to
DER integration, grid support capabilities are needed for higher levels of EV penetration. Smart
city standards mark another gap in the current standards landscape. Smart city standards might
bring together networking, transportation, home and building, Internet of Things, microgrid,
and other relevant standards into a cohesive framework that allows cities to meet certain
operating objectives. IEEE 2013-2019 provides a start to smart city standards by laying out an
architectural framework for the IoT.

F. Cybersecurity
The current landscape of the U.S. economy is tightly coupled with the electric grid. The grid’s
growing reliance on networked systems and smart devices means that cybersecurity must be a
central consideration when designing the evolving smart grid. The needs to secure a smart grid
range from performing R&D to advancing industry standards and supporting implementation of
best practices. As cyber threats to the grid continue to advance, so must the framework of R&D,
standards, and practices to reduce the risks of cyber-enabled grid disruptions that impact U.S.
economic health and safety.

1. GROWING THREATS TO GRID CYBER-PHYSICAL SECURITY

In August 2019, the Office of the Director of National Intelligence stated, “We face a perfect
storm comprised of information technology (IT) vulnerabilities associated with the proliferation
of software and network technologies; increasing reliance on foreign-owned, manufactured, or
controlled hardware, software, and services; and adversaries’ increasingly persistent and
sophisticated asymmetric cyberattacks.” 35 Increasingly sophisticated and frequent cyberattacks
represent a significant challenge for a modern grid that is increasing its digital connections and
controls.

Intelligent devices across the system are increasingly network connected to manage the
growing complexity of a modern grid. This connectivity brings new capabilities, efficiencies, and
situational awareness, but also increases the attack surface for intruders. Coupling digital
control capabilities with electromechanical devices (e.g., electrical switches) results in the
ability to create physical grid disruptions through cyber means, not just physical attacks, which
creates an integrated “cyber-physical” grid layer that must be secured in concert.

Smart Grid System Report 2020 | Page 118

 Department of Energy |January 2022

In 2019, the Director of the National Counterintelligence and Security Center stated, “the
energy sector remains a key target of nation-state cyber intrusions, supply chain attacks,
economic espionage efforts and other threats.” 36

The scale of the challenge is growing while reliable and resilient electric service is ever more
essential to citizens and the U.S. economy. Although the U.S. electric energy sector has not yet
experienced a known serious cyber-related disruption, a 2015 widespread blackout in Ukraine
resulting from spear phishingaaaa cyberattacks demonstrates the potential physical
consequences of a sophisticated, targeted attack by knowledgeable actors. 37 This cyber
intrusion affected three electric distribution companies and left over 225,000 customers
without power.

U.S. electric utilities are constantly targeted. From April 5 to August 29, 2019, at least 17
U.S.-based electric utilities received spear phishing emails appearing to be from an industry
licensing body with the intent to deliver malware. 38 Reports of these incidents indicate that
more than a dozen relatively small U.S. utilities, located near dams, locks, and other critical
infrastructure, were targeted in this wave of cyberattacks. 39 Smaller electric utilities often have
less robust cyber infrastructure and could have vulnerabilities that pose an immense threat to
the electric grid and the critical infrastructure served.

2. MANAGING CYBER RISKS TO SMART GRID INFRASTRUCTURE

As grid operators increasingly rely on the data from digital devices and third-party systems to
make real-time operating decisions or deploy automated systems, cyber risks must be managed
in the following areas:

• Industrial control systems (ICS)

• Grid-edge devices and consumer IoT bbbb
• Global positioning systems (GPS) cccc
• Digital technology supply chain

Industrial Control System Risks

Smart grid devices and ICS are considered operational technology (OT)—digital devices and
networks that control critical physical grid processes, including the generation, transmission,
and delivery of electricity. While traditional information technology (IT) is typically used in
utility business management systems (such as payroll, HR, and billing), OT systems are typically

aaaa
Spear phishing is an email or electronic communications scam targeted toward a specific individual,
organization, or business. Although often intended to steal data for malicious purposes, cybercriminals may also
intend to install malware on a targeted user’s computer.
bbbb
IoT (Internet of Things) is defined by GAO as the concept of connecting and interacting through a broad
network array of “smart” devices, such as building energy management systems, smart thermostats, or electric
vehicle charging stations. Consumer DERs are included as IoT for the purposes of this report.
cccc
GAO defines GPS as “a global positioning, navigation, and timing system consisting of space, ground control,
and user equipment segments that support the broadcasts of military and civil GPS signals.”

Smart Grid System Report 2020 | Page 119

 Department of Energy |January 2022

separate networks of control equipment with limited connections to the internet. dddd Grid
modernization is frequently experiencing a convergence of IT and OT systems.

ICS frequently now comprise less expensive and more widely available devices that often use
traditional IT networking protocols. These modern devices have remote access capabilities and
often are connected to corporate business networks. With interconnected systems,
cyberattacks can migrate from business networks to industrial control systems and gain remote
access to ICS devices. Figure 71 shows the interaction of these networks and systems.

FIGURE 71. BUSINESS IT AND OT INDUSTRIAL CONTROL SYSTEM NETWORK INTERACTIONS 40

Source: GAO, Critical Infrastructure Protection: Actions Needed to Address Significant Cyber Security Risks Facing
the Electric Grid

Grid-Edge Devices and Consumer Internet of Things

Grid-edge devices, such as customer-owned DER, and other smart technologies (such as smart
thermostats, appliances, and electric vehicle charging infrastructure) that make up the
consumer-based IoT are being integrated with utility and third-party systems. Although this
integration is necessary to manage grid complexity, it marks an enormous expansion of the
number of entry points for malicious actors. An intruder could use the end device to gain access

IT cybersecurity covers computers and networks that support utility business administrative processes,
dddd

whereas OT covers electronic devices with embedded operating systems.

Smart Grid System Report 2020 | Page 120

 Department of Energy |January 2022

into utility IT/OT systems, to enter a third-party (e.g., DER aggregator) system, or to falsify or
spoof system data that causes an operator to take action that harms the system. Either case
could have major impacts on safe and reliable operation of the electric grid.

In addition, consumer data privacy is tightly intertwined with cybersecurity issues. As described
in Section V, many regions rely on AMI to collect and transmit consumer electric usage data.
AMI introduces potentially hundreds of thousands or even millions of access points to intercept
consumer data. 41 Attackers could target the data, network, or physical devices, compromising
consumer data or utility networks.

Global Positioning Systems

The grid depends on GPS for position, navigation, and timing (PNT) information to monitor and
control generation, transmission, distribution assets. Malicious actors might inject counterfeit
GPS signals that could disrupt grid operations.42 For example, wide-area monitoring and control
equipment uses GPS clocks for extremely precise timing data. Some of these systems serve
roles in protecting the system, and misoperations could cause widespread outages or damage
system equipment. Ensuring critical equipment is resilient against this threat, factoring in the
responsible use of PNT throughout the system, and adherence to best practices can help
mitigate this threat.43

Supply Chain
Supply chain risks can translate to cybersecurity risks for IT/OT technology due to the global
nature of manufacturing.44,45 International standards and practices have been developed to
ensure device integrity and functionality because manufacturers of smart grid technology
source components from a wide range of vendors. This broad-based sourcing increases the
opportunity for malicious code to be introduced into equipment during the manufacturing
process that can impair safe and reliable grid operation. NERC has created reliability standard
CIP-013-1 to address supply chain risks and mitigate potential issues for the power system.
NERC is also implementing modifications to standard 2019-03 Cybersecurity Supply Chain Risks
to modify supply chain standards for those systems that provide electronic and physical access
control to high- and medium-impact cyber systems.

North American Electric Reliability Corporation Critical Infrastructure Protection and Other
Cybersecurity Standards
NERC Critical Infrastructure Protection (CIP) Reliability Standards are part of protecting the bulk
power system, but currently do not cover the distribution system. NERC standards are used to
bolster cybersecurity controls and clarify compliance activities in relation to the physical
security of cyber systems, system security management, incident reporting, and recovery plans
for cyber systems. They are being consistently revised to deal with emerging issues. NERC is
developing a new standard (2019-02) to clarify requirements related to access to bulk power
system cyber information. In July 2020, NERC and NIST published a mapping between NERC CIP
cybersecurity requirements and NIST Cybersecurity Framework Version 1.1 to provide guidance

Smart Grid System Report 2020 | Page 121

 Department of Energy |January 2022

on the identification and implementation of best practices for cyber asset security and
protection. 46

On June 24, 2020, FERC issued a notice 47 seeking comment on potential enhancements to NERC
CIP Reliability Standards. The notice specifically seeks input on whether currently effective CIP
Reliability Standards adequately address: (1) cybersecurity risks pertaining to data security, (2)
detection of anomalies and events, and (3) mitigation of cybersecurity events. In addition to
these CIP Reliability Standards focus areas, FERC is also seeking feedback on the potential risks
of a coordinated cyber-attack on geographically distributed assets and whether this warrants
FERC action.

Appendix VII.C.3 contains an overview of cybersecurity R&D, risk management frameworks,

tools, and standards that utilities can leverage to secure their digital infrastructure and reduce
the risks of a cyber-attack on modern grid systems. Despite cybersecurity advances, continued
investment is needed in cybersecurity technologies and resources to help utilities keep pace
with a rapidly evolving and increasingly sophisticated threat landscape. New smart grid
technologies and systems must be cyber secure by design. A few areas where continued R&D is
needed are in areas of:

• Development and validation of hardware and software sensing technologies for the
rapid detection of anomalies
• Cyber intrusion signature library incorporating real-time data feeds from sensors in the
field to enable artificial intelligence and machine learning
• Isolation of automated systems, self-healing networks, and security frameworks for
power grid applications

G. Workforce
Developing a pipeline of qualified and diverse employees to support a more complex electric
grid will be essential to the electric sector’s technological transition. After large waves of
retirements over the past decade at utilities, the rate of retirement attrition is stabilizing. The
skills required to plan, build, and operate the future grid effectively are changing rapidly,
however, due to technology deployments and the changing grid resource mix. In particular, the
pervasive application of digital technology is requiring more highly skilled workers and
engineers. Increasing digitization, innovation, and opportunities in other industries have
meanwhile created a shortage in the necessary technical skills to operate a smart grid, resulting
in increasing competition for qualified staff and an emerging challenge of nonretirement
attrition for the electric sector. In addition to evolving utility and system operator skill sets,
technology vendors and third-party resource providers are seeing an expanding role in the
electric sector, requiring a skilled workforce to support the industry. These combined factors
create continued challenges for the electric industry to attract, recruit, hire, and retain qualified
applicants.

Smart Grid System Report 2020 | Page 122

 Department of Energy |January 2022

1. EVOLVING NEEDS FOR WORKFORCE SKILLSETS

The technical skills needed to plan, construct, and operate the electric grid effectively are
rapidly changing. In the past, key required technical skills were in the areas of power systems
and analog controls. As the grid continues to evolve into a digital system, utility workforces
might not currently have the skillsets needed to facilitate this transition or to take full
advantage of smart grid deployments. The evolving smart grid has a wider range of
technologies that require new skillsets, some of which constitute their own discipline
(e.g., communication systems, cybersecurity, or data analytics). Figure 72 illustrates the skillsets
underlying the traditional and modern grids. Similarly, the skills employed by the workforce in
the trades, such as electrical troubleshooting crews and field technicians, are changing as the
interaction with digital devices and IT/OT systems becomes essential to perform basic grid
operations. Approximately two-thirds (63 percent) of utility employers in electric power
generation reported that hiring new employees with the necessary skills was either somewhat
or very difficult.48

FIGURE 72. WORKFORCE SKILLS NEEDED FOR THE EVOLVING GRID

The Center for Energy Workforce Development (CEWD) analyzed how several aspects of grid
modernization are changing the required workforce skills for key positions, as illustrated in

Smart Grid System Report 2020 | Page 123

 Department of Energy |January 2022

Figure 73. Each position will see a change in the skills, tools, and technology required for a
modern grid, but the engineering workforce skills are expected to be most impacted.

FIGURE 73. INDUSTRY TRANSFORMATION IMPACT ON WORKFORCE SKILLS 49

Job Category

an

or
ici

at
hn

s
er

ce
n

Op
cia

ec

vi
rT

er
ni
r

d
ke

el
ch

tS
to

er
or

Fi
Te

ra

or
ne
t/
ew

ne

pp
D

an

gi
L in

T&

Ge

En

Su
Pl
Infrastructure Modernization

Energy Generation Transformation

Industry Driver

Physical/Cyber Security

Customer Expectations

Enabling Technology

Transitioning Workforce

Mimimal Moderate High

Key: Impact Impact Impact

Source: Adapted from CEWD

2. CHANGING WORKFORCE SIZE AND MAKEUP

Key Job Categories

Whereas supporting the electric grid requires many different skillsets, four key job categories
form the core of the utility workforce that plans, constructs, and operates the grid: line
workers, technicians, plant/field operators, and engineers, as illustrated in Figure 74. These key
job categories make up almost half the utility workforce (45 percent). eeee

eeee
The remaining 55 percent consists of jobs in corporate services, including human resources, customer service,
finance, and information technology.

Smart Grid System Report 2020 | Page 124

 Department of Energy |January 2022

FIGURE 74. KEY ELECTRIC GRID JOBS, CURRENT SIZE AND POTENTIAL REPLACEMENT NEEDS 50

The industry’s approximately 603,000 employees (about 271,000 key jobs) are spread across
the three types of utilities—investor-owned utilities (IOUs), public power, and rural electric
cooperatives. 51 Rural electric cooperatives have a lower percentage of key jobs when compared
to other utilities, with only about a third of their workforce devoted to these four essential
roles. Accordingly, integrating smart grid technology and DERs can be challenging for rural
electric cooperatives.

Engineering and support staff could experience the greatest pressure to grow in response to
changing grid technologies and needs. Figure 75 illustrates the impact of various industry
drivers on the size of different utility job categories. The number of some jobs will likely
decrease, however, as automation replaces what was done manually. Business cases for
technology and modernization are usually based on providing better service at less cost,
typically founded on fewer personnel to perform the work over the long run, a potential driver
for a steady or declining overall workforce size.

Smart Grid System Report 2020 | Page 125

 Department of Energy |January 2022

FIGURE 75. INDUSTRY TRANSFORMATION IMPACT ON WORKFORCE SIZE 52

Job Category

an

or
ici

at
hn

s
er

ce
n

Op
cia

ec

vi
rT

er
ni
r

d
ke

el
ch

tS
to

er
or

Fi
Te

ra

or
ne
t/
ew

ne

pp
D

an

gi
L in

T&

Ge

En

Su
Pl
Infrastructure Modernization

Energy Generation Transformation

Industry Driver

Physical/Cyber Security

Customer Expectations

Enabling Technology

Transitioning Workforce

Mimimal Moderate High

Key: Impact Impact Impact

Source: Adapted from CEWD

The Workforce is Growing Younger

Retirements have slowed down as electricity industry workforce attrition stabilizes. Overall
retirements are now forecast at a little over two percent a year for the next 10 years. A quarter
of current lineworkers are eligible for retirement over the next 10 years, however, in contrast
to only two percent of engineers, meaning that pressures and opportunities could be increasing
for lineworkers qualified to work on field smart grid equipment. The turnover for lineworkers
provides an opportunity to hire the qualifications needed. As a result, the training and
requirements for their jobs should be adjusted so hiring is done for the future, rather than as it
has been in the past. With little turnover in the engineering sector, flexibility and adaptability
will need to increase to expand skills while in position. Also, careful consideration will be
needed for new hires as hiring presents a unique opportunity to introduce skills not available in
the native workforce. Figure 76 shows how the energy workforce age distribution has flattened
from 2006 to 2018.

Smart Grid System Report 2020 | Page 126

 Department of Energy |January 2022

FIGURE 76. ENERGY WORKFORCE AGE DISTRIBUTION 53

Source: CEWD, Gaps in the Energy Workforce

Nonretirement Attrition is an Emerging Challenge

As retirements have slowed, nonretirement attrition is emerging as a serious challenge for
maintaining a pipeline of a qualified workers. Younger workers in the 23- to 37-year age group
have the highest attrition rate (57 percent) within the first five years. Overall, the five-year
nonretirement attrition rate for key jobs averages 13 percent, with 60 percent of those losses
occurring within the first five years of employment. Departures at this early stage increase
hiring and training costs. Early attrition is driven by several factors, including:

• Increased Competition: As the electric sector integrates modern IT/OT technology, the
skill sets required overlap with the broader technology industry. Accordingly, the
electric sector competes with opportunities at large technology companies
(e.g., Amazon, Google, or Facebook) that are more attractive to college graduates and
employees with advanced technical skills.

• Values Alignment: Employees, especially millennials, prefer to work for organizations

whose values and mission resonate with their own. If the electric sector is viewed as not
having the same values, employees with transferable skills might move to a different
sector.

• Workplace Technology: Younger workers tend to be more tech savvy, having grown up
around technological devices and tools not available to earlier generations. To that end,
younger workers often expect a workplace with modern workplace technology
(e.g., tools for communication, collaboration, analytics, community development, and
the opportunity to work remotely). Companies without these technologies risk losing
workers to industries with more progressive technology practices.

Smart Grid System Report 2020 | Page 127

 Department of Energy |January 2022

3. AREAS OF GROWTH AND DECLINE IN THE ELECTRIC SECTOR

Although traditional transmission and distribution jobs remain dominant in the electric sector
employment landscape, positions dedicated to emerging technologies (such as batteries and
microgrids) and grid modernization are becoming increasingly available. For example, in 2018,
the industry added more than 9,500 new battery storage-related jobs, an 18 percent growth
rate. Figure 77 shows the workforce size for key sectors related to smart grid deployments and
provides anecdotal evidence that the skills for emerging areas, as shown in Figure 72, are on
the rise. In addition, power electronics is embedded in all these smart grid technologies and is
incremental to skills generally found in the electric utility workplace today. The relationship
with different technical community, however, need to be enhanced. In an IEEE PES survey, 70
percent of participants believe that a strong relationship needs to be developed with computer
engineers and 56 percent participants indicate a need for economic and financial experts. 54

FIGURE 77. WORKFORCE SIZE BY ELECTRIC INDUSTRY SECTOR 55

4. EDUCATION AND TRAINING TO ATTRACT AND ADAPT A SMART GRID

WORKFORCE
The current electricity industry workforce will need ongoing training and education to use
modern technologies, adapt to new ways of doing business, and improve efficiency. 56 Although
several activities are underway, more are needed to prepare for the future. For example, new
technologies such as drones, tablets, wearables, simulators, and augmented-, virtual-, and
mixed-reality systems are gaining traction as new ways for workers to take reference
information into the field site or for when real-world conditions are infrequent or hazardous for
training. These technologies offer safety and productivity gains, but they also increase job
complexity for workers accustomed to performing their jobs using manual or analog processes.
Another opportunity for transitioning the current workforce is emphasizing a systems-thinking
approach to facilitate an appreciation for interrelationships and complexity.

Smart Grid System Report 2020 | Page 128

 Department of Energy |January 2022

Finally, because cybersecurity challenges are constantly evolving, the workforce must receive
ongoing training on cybersecurity best practices. To develop a workforce pipeline of the right
size, skills, and diversity for a modern grid, the electricity industry needs a combination of
efforts:

• K-12 science, technology, engineering, and mathematics (STEM) education programs

that build interest in energy sector and electrical engineering subjects. STEM education
needs to introduce young people to more topics central to the electric sector, such as
the role of distributed generation and microgrids in alleviating grid outages, reducing air
pollution from cars by transitioning to electric vehicles, emphasizing the role of energy
efficiency measures to reduce energy poverty, and demonstrating the value of data
science in analyzing grid data.

• More widespread university power systems engineering programs that include a focus
on cutting-edge grid technologies. Universities are experiencing increased electrical
engineering enrollment, but power systems programs are not widespread. The number
of degrees awarded in the electrical engineering discipline grew by 22.1 percent from
2014 to 2018.57 The number of electrical engineering programs that include a power
focus have also been on the rise. 58 However, utilities have found many university
graduates in the electrical engineering discipline had limited or no training in the real-
world standards, principles, and practices followed at an electric utility, however,
requiring heavy investment in additional training for new graduates.59

• Continuous education courses that enable active engineering professionals to adapt to

rapid industry changes. Grid transformation is significantly affecting the skills
requirements for electricity industry workers of all types, as discussed above. For active
engineering professionals adapting to rapid industry changes, the Electric Power
Research Institute’s (EPRI’s) GridEd workforce development initiative has developed
short educational courses on new topics in power engineering and data science. ffff
Through 2018, the most popular courses by enrollment were: 60

• DG interconnection on radial distribution systems

• Energy storage technologies, applications, and integration
• Applications of smart inverter technology
• Electric power distribution systems
• Business case analysis in the electric utility industry

Cybersecurity training is a significant area of need. According to state energy officials, the
demand for skilled cybersecurity professionals is outpacing available workers. 61

The GridEd effort involves collaboration among EPRI, four partner universities (Stony Brook University,
ffff

University of California – Riverside, Virginia Tech, and Washington State University), and utility and industry
sponsors.

Smart Grid System Report 2020 | Page 129

 Department of Energy |January 2022

Utilities have begun to train staff on “digital hygiene” skills such as safe email use and
identification of phishing attempts and have developed and allocated larger budgets for digital
operations and security. Utilities are initiating compliance training efforts for cybersecurity
frameworks developed by NERC, NIST, DOE, and others. Increased levels of training are needed
to strengthen cyber-physical workforce competencies for data analytics, visualization, risk
management, threat and vulnerability assessments, and access controls. Appendix VII.C.5
outlines numerous government and industry workforce development initiatives under way
today; however, more is needed to keep pace with the rate of industry change.

5. ATTRACTING A DIVERSE AND REPRESENTATIVE WORKFORCE

A continued focus on diversity and inclusion is
needed for the electricity industry pipeline and FIGURE 78. UTILITY WORKFORCE
workforce to better resemble the U.S. population COMPOSITION 62
mix. Diversity in the workforce is still a challenge
for the electric sector and utility industry. Women,
minorities, and veterans are significantly
underrepresented in the utility workforce when
compared to the U.S. population at large, as shown
in Figure 78.

Electrical engineering degrees issued to different

racial and ethnic groups are a leading indicator of Source: CEWD, Gaps in the Energy Workforce
diversity of the future smart grid engineering
workforce. While fewer African American and Hispanic students enroll in electrical engineering
programs compared to other groups, the number is rising. gggg The number of Black or African
Americans receiving an electrical engineering degree increased by 21 percent between 2012
and 2017. The number of Hispanic and Latino students receiving an electrical engineering
degree increased by 51 percent between 2012 and 2017. The remainder of the population
received fewer electrical engineering degrees from 2010 to 2017 (1.1 percent decrease).
Figure 79 shows the total percentage of degrees awarded by race and gender in 2012 and 2017.

gggg
Based on data from NCES.

Smart Grid System Report 2020 | Page 130

 Department of Energy |January 2022

FIGURE 79. ELECTRICAL ENGINEERING DEGREES BY RACE AND GENDER 63,64

Smart Grid System Report 2020 | Page 131

 Department of Energy |January 2022

Section Endnotes

1
Taft, JD. Grid Architecture 2. Pacific Northwest National Laboratory. January 2016.
https://gridmod.labworks.org/sites/default/files/resources/Grid%20Architecture%202%20final_GMLC.pdf.
2
De Martini, P., & Kristov, L., Distribution Systems in a High Distributed Energy Resource Future: Planning, Market
Design, Operation and Oversight, 2015. https://emp.lbl.gov/sites/default/files/lbnl-1003797.pdf.
3
Operational Coordination across the Bulk-Power, Distribution, and Customer Systems, by P. De Martini, L. Kristov,
and J. Taft, prepared for the Electricity Advisory Committee, US Department of Energy, February 2019.
4
Ibid.
5
DOE, DOE Modern Distribution Grid – Strategy and Implementation Planning Guidebook, Volume 4 of the Next-
Generation Distribution System Platform (DSPx) Initiative, U.S. Department of Energy, draft.
https://gridarchitecture.pnnl.gov/media/Modern-Distribution-Grid_Volume_IV_v1_0_draft.pdf.
6
Ibid.
7
Ibid.
8
Ibid.
9
U.S. DOE, Distribution Automation: Results from the Smart Grid Investment Grant Program, September 2016.
https://www.energy.gov/sites/prod/files/2016/11/f34/Distribution%20Automation%20Summary%20Report_09-
29-16.pdf.
10
DOE, Advanced grid research and development, https://www.energy.gov/oe/mission/oe-divisions/advanced-
grid-research-and-development.
11
U.S. DOE, U.S. Department of Energy Power Electronics Strategy, Office of Electricity, TRAC Program, July 2020.
12
Ibid.
13
Ibid.
14
Ibid.
15
IEEE, 1547-2018 - IEEE Standard for Interconnection and Interoperability of Distributed Energy Resources with
Associated Electric Power Systems Interfaces. https://standards.ieee.org/standard/1547-2018.html.
16
U.S. DOE, U.S. Department of Energy Power Electronics Strategy, Office of Electricity, TRAC Program, July 2020.
17
“Reliability Guidance – BPS-Connected Inverter-Based Resource Performance,” North American Electric
Reliability Corporation, September 2018.
18
Ibid.
19
Adapted by J. Paladino, DOE, from Architectural Basis for Highly Distributed Transactive Power Grids:
Frameworks, Networks, and Grid Codes, by JD Taft, June 2016, PNNL-25480.
https://gridarchitecture.pnnl.gov/media/advanced/Architectural%20Basis%20for%20Highly%20Distributed%20Tra
nsactive%20Power%20Grids_final.pdf.
20
DOE, DOE Modern Distribution Grid – Strategy and Implementation Planning Guidebook, Volume 4 of the Next-
Generation Distribution System Platform (DSPx) Initiative, U.S. Department of Energy, draft.
https://gridarchitecture.pnnl.gov/media/Modern-Distribution-Grid_Volume_IV_v1_0_draft.pdf.
21
U.S. DOE, DOE releases Draft Energy Storage Grand Challenge Roadmap and Requests Stakeholder Input.
Available online at: https://www.energy.gov/articles/doe-releases-draft-energy-storage-grand-challenge-
roadmap-and-requests-stakeholder-input.
22
U.S. DOE, Energy Storage Grand Challenge Draft Roadmap, July 2020,
https://www.energy.gov/sites/prod/files/2020/07/f76/ESGC%20Draft%20Roadmap_2.pdf.
23
NIST, Smart Grid Framework, NIST Framework and Roadmap of Smart Grid Interoperability Standards, Release
4.0, September 2020. https://www.nist.gov/el/smart-grid/smart-grid-framework.

Smart Grid System Report 2020 | Page 132

 Department of Energy |January 2022

24
Adapted by F. Cleveland, IEC 62351 Security Standards for the Power System Information System, 2012.
http://iectc57.ucaiug.org/wg15public/Public%20Documents/White%20Paper%20on%20Security%20Standards%20
in%20IEC%20TC57.pdf.
25
Sensing and Measurement Architecture for Grid Modernization, by Jeffrey Taft and Paul De Martini, PNNL-25249,
February 2016. Available online at:
https://gridarchitecture.pnnl.gov/media/advanced/Sensor%20Networks%20for%20Electric%20Power%20Systems.
pdf.
26
U.S. Energy Independence and Security Act of 2007, Public Law 110-140-DEC. 19, 2007, Available online at:
https://www.govinfo.gov/content/pkg/PLAW-110publ140/pdf/PLAW-110publ140.pdf.
27
NIST, Smart Grid Framework, NIST Framework and Roadmap of Smart Grid Interoperability Standards, Release
4.0, Available online at: https://www.nist.gov/el/smart-grid/smart-grid-framework.
28
J. MacDowell et al., A Journey Through Energy Systems Integration: Trending Grid Codes, Standards, and IEC
Collaboration, in IEEE Power and Energy Magazine, vol. 17, no. 6, pp. 79-88, Nov.-Dec. 2019.
29
NERC, Project 2019-02 BES Cyber System Information Access Management, Available online at:
https://www.nerc.com/pa/Stand/Pages/Project2019-02BCSIAccessManagement.aspx.
30
IEEE, 2030–2011 – IEEE Guide for Smart Grid Interoperability of Energy Technology and Information Technology
Operation with the Electric Power System (EPS), End-Use Applications, and Loads.
31
IEEE, IEEE, 1547-2018 – IEEE Standard for Interconnection and Interoperability of Distributed Energy Resources
with Associated Electric Power Systems Interfaces. Available for purchase at:
https://standards.ieee.org/standard/1547-2018.html.
32
Minnesota Public Utilities Commission, Docket No E-999/CI-16-521, In the Matter of Updating Generic Standards
for the Interconnection and Operation of Distributed Generation Facilities. Available online at:
https://mn.gov/puc/assets/January%2022%202020%20Order_tcm14-431303.pdf.
33
NARUC, Resolutions Proposed for Consideration at the 2020 Winter Policy Summit, 1/28/2020, available online
at: https://pubs.naruc.org/pub/49A6A319-155D-0A36-3140-EFAD21E48B50.
34
NERC, PRC-024-2 Gaps Whitepaper, NERC Inverter-Based Resource Performance Task Force, Available online at:
https://www.nerc.com/comm/PC/InverterBased%20Resource%20Performance%20Task%20Force%20IRPT/NERC_I
RPTF_PRC-024-2_Gaps_Whitepaper_FINAL_CLEAN.pdf.
35
Source: Office of the Director of National Intelligence, Improving Cybersecurity for the Intelligence Community
Information Environment Implementation Plan, August 2019.
36
Security, FBI, Federal Agencies Brief Energy Sector on Data Breaches, Cyberattacks, Available online at:
https://www.securitymagazine.com/articles/91244-fbi-federal-agencies-brief-energy-sector-on-data-breaches-
cyberattacks.
37
CISA, U.S. Department of Homeland Security, ICS Alert (IR-ALERT-H-16-056-01), Cyber-Attack Against Ukrainian
Critical Infrastructure, Available online at: https://www.us-cert.gov/ics/alerts/IR-ALERT-H-16-056-01.
38
Proofpoint, LookBack Forges Ahead: Continued Targeting of the United States’ Utilities Sector Reveals Additional
Adversary TTPs, September 23, 2019.
39
The Wall Street Journal, Utilities Targeted in Cyberattacks Identified, November 24, 2019. Available online at:
https://www.wsj.com/articles/utilities-targeted-in-cyberattacks-identified-11574611200.
40
GAO, Critical Infrastructure Protection: Actions Needed to Address Significant Cyber Security Risks Facing the
Electric Grid, GAO-19-332, August 2019. https://www.gao.gov/assets/710/701079.pdf.
41
Halim, Fatemeh, et al., Cyber Security Issues in Smart Meter and Their Solutions, International Journal of
Computer Science and Network Security, Vol 18, No. 3, March 2018. Available online at:
http://paper.ijcsns.org/07_book/201803/20180314.pdf.
42
U.S. Government Accountability Office, Critical Infrastructure Protection – Actions Needed to Address Significant
Cybersecurity Risks Facing the Electric Grid, August 2019.

Smart Grid System Report 2020 | Page 133

 Department of Energy |January 2022

43
U.S. Department of Homeland Security, Improving the Operation and Development of Global Positioning System
(GPS) Equipment Used by Critical Infrastructure, Available online at: https://us-
cert.cisa.gov/sites/default/files/documents/Improving_the_Operation_and_Development_of_Global_Positioning_
System_%28GPS%29_Equipment_Used_by_Critical_Infrastructure_S508C.pdf.
44
Congressional Research Service, Electric Grid Cybersecurity, September 4, 2018. Available online at:
https://fas.org/sgp/crs/homesec/R45312.pdf.
45
Protect Our Power, A Review of Power Industry’s Supply Chain Security Risks, February 20, 2020.
46
NERC, Mapping of CIP Standards to NIST Cybersecurity Framework (CSF) v1.1Subcategories performed by
Electric Industry Responsible Entity volunteers, NIST and NERC, Available online at:
https://www.nerc.com/pa/comp/CAOneStopShop/NIST%20CSF%20v1.1%20to%20NERC%20CIP%20FINAL.XLSX.
47
U.S. Federal Register, Potential Enhancements to the Critical Infrastructure Protection Reliability Standards, FERC,
June 24, 2020, Available online at: https://www.federalregister.gov/documents/2020/06/24/2020-
13618/potential-enhancements-to-the-critical-infrastructure-protection-reliability-standards.
48
NASEO, EFI, The 2019 U.S. Energy & Employment Report, Available online at:
https://static1.squarespace.com/static/5a98cf80ec4eb7c5cd928c61/t/5c7f3708fa0d6036d7120d8f/155184905454
9/USEER+2019+US+Energy+Employment+Report.pdf.
49
Figure is adapted from Center for Energy Workforce Development, State of the Energy Workforce 2018,
Available online at: http://www.cewd.org/documents/SOTI2018-Final.pdf.
50
Center for Energy Workforce Development, Gaps in the Energy Workforce 2019 Pipeline Survey Results. Available
online at: http://cewd.org/documents/surveyreport/2019-GapsintheEnergyWorkforce-SurveyResults.pdf.
51
Ibid.
52
Figure is adapted from Center for Energy Workforce Development, State of the Energy Workforce 2018,
Available online at: http://www.cewd.org/documents/SOTI2018-Final.pdf.
53
Center for Energy Workforce Development, Gaps in the Energy Workforce 2019 Pipeline Survey Results. Available
online at: http://cewd.org/documents/surveyreport/2019-GapsintheEnergyWorkforce-SurveyResults.pdf.
54
IEEE PES, Survey Report: IEEE PES Future Directions.
55
NASEO, EFI, The 2019 U.S. Energy & Employment Report, Available online at:
https://static1.squarespace.com/static/5a98cf80ec4eb7c5cd928c61/t/5c7f3708fa0d6036d7120d8f/155184905454
9/USEER+2019+US+Energy+Employment+Report.pdf.
56
EPRI, Program on Technology Innovation: The Future of Utility Training and Education, January 2019.
57
American Society for Engineering Education, Growth in Engineering Degrees by Discipline 2014 – 2018, October
18, 2019. Available online at: https://ira.asee.org/growth-in-engineering-degrees-by-discipline-2014-2018/.
58
IEEE PES, Electrical Power Engineering Education Resources: 2015–2016 US and Canadian University Survey
Results, November 2017, Available online at: https://www.ieee-pes.org/images/files/pdf/peec-survey/2015-
16_PES_PEEC_Survey_Report_Final_11-2017.pdf.
59
EPRI, Leveraging Industry Research to Educate a Future Electric Grid Workforce, August 2019.
60
EPRI, Leveraging Industry Research to Educate a Future Electric Grid Workforce, August 2019.
61
NASEO, EFI, I, Available online at:
https://static1.squarespace.com/static/5a98cf80ec4eb7c5cd928c61/t/5c7f3708fa0d6036d7120d8f/155184905454
9/USEER+2019+US+Energy+Employment+Report.pdf.
62
Center for Energy Workforce Development, Gaps in the Energy Workforce 2019 Pipeline Survey Results. Available
online at: http://cewd.org/documents/surveyreport/2019-GapsintheEnergyWorkforce-SurveyResults.pdf.
63
Data source for figure: Integrated Postsecondary Education Data System conducted by the US Department of
Education’s National Center for Education Statistics (NCES). Available online at: https://nces.ed.gov/ipeds/use-the-
data.
64
Data source for figure: United States Census Bureau Quick Facts. Available online at:
https://www.census.gov/quickfacts/fact/table/US/PST045218.

Smart Grid System Report 2020 | Page 134

 Department of Energy |January 2022

VI. Conclusion
The electric grid is considered an ultra-large-scale (ULS) system, 1 much like natural ecosystems
and cities, in that it is faced with a) inherently conflicting and diverse requirements;
b) decentralized data, development, and control; c) continuous evolution and deployment;
d) heterogeneous, inconsistent, and changing elements; and e) normal failures. This complexity
is becoming more pronounced as consumers shift from being users of the grid to becoming
elements of it, along with technology providers offering grid services utilities traditionally
supply. ULS systems are not typically designed through top-down engineering, yet they function
in a highly complex and organized manner, given competing needs and objectives by the
elements that function within it.

The challenges we face are both technological and institutional in nature; we need to advance
and effectively integrate our technological solutions, as well as help decision makers with
methods and tools so they can craft grid modernization strategies that deploy these solutions
over time in practical ways to meet future demands. This will require instituting the appropriate
technology, processes, and design considerations to maintain a stable, coherent, and
manageable grid system as it evolves, and to do so in a way that addresses the increased levels
of complexity and uncertainty presented by continual technological advancement, policy shifts,
and changing customer expectations. In the end, such strategies need to consider reliability,
efficiency, security, resilience, and affordability as outcomes.

Smart Grid System Report 2020 | Page 135

 Department of Energy |January 2022

Section Endnotes

1
Northrop, L., Feiler, P., Gabriel, R. P., Goodenough, J., Linger, R., Longstaff, T., Kazman, R., Klein, M., Schmidt, D.,
Sullivan, K. & Wallnau, K. (2006). Ultra-Large-Scale Systems—The Software Challenge of the Future. Software
Engineering Institute, Carnegie Mellon.

Smart Grid System Report 2020 | Page 136

 Department of Energy |January 2022

VII. Appendices

A. Factors Shaping Smart Grid Deployments (Section III)

Table 12 shows the main categories of electric grid services. Numerous market products exist
for regulation and flexibility grid services.

TABLE 12. ELECTRIC GRID SERVICES

Standard Description
How Fast to Length of Time to Fully How Often
Product Type General Description
Respond Response Respond Called
Regulation Response to random 30 seconds Energy neutral 5 minutes Continuous
unscheduled deviations in in 15 minutes within
scheduled net load specified bid
(bidirectional) period
Flexibility Additional load-following 5 minutes 1 hour 20 minutes Continuous
reserve for large within
unforecasted wind/solar specified bid
ramps (bidirectional) period
Contingency Rapid and immediate 1 minute ≤30 minutes ≤10 minutes Once per day
response to a loss in supply
Energy Shed or shift energy 5 minutes ≥1 hour 10 minutes 1–2 times per
consumption over time day with 4- to
8-hour
notification
Capacity Ability to serve as an Top 20 hours, coincident with balancing authority area system
alternative to generation peak
Source: Kiliccote, et al. 2015

B. Investments and Technology Applications (Section IV)

Community Choice Aggregation
A significant driver of accelerated growth in these technologies is the increasingly important
role of community choice aggregators (CCAs), which are local governmental entities confined to
a specific geographic area, that procure electricity on behalf of retail electric customers.
Although the traditional utility will typically remain responsible for transmission and
distribution of electricity, the CCA will drive choices over the sources of electricity on behalf of
its customers, as shown in Figure 80.

Smart Grid System Report 2020 | Page 137

 Department of Energy |January 2022

FIGURE 80. CORE ASPECTS OF COMMUNITY CHOICE AGGREGATORS

Source: Natioanl Renewable Energy Laboratory (NREL)

CCAs have become an increasingly popular option for electricity procurement—that is, in the
eight states that currently allow them 1—because of their emphasis on procuring additional
amounts of renewable generation, including voluntary green power that is above and beyond
the Renewable Portfolio Standard (RPS of the given state, as shown in Figure 81. If CCAs
continue to drive greater renewable deployment, the need will increase for system operators to
have greater levels of smart grid technologies to enable the level of observability and control
necessary to effectively manage a more variable and distributed generation mix. Continued
growth of CCAs faces challenges, however, including recent decisions such as that in California
where the California Public Utilities Commission (CPUC) adopted a central procurement
framework that designates the investor-owned utilities (IOUs) as the central buyers for local
resource adequacy. 2

FIGURE 81. RENEWABLES SHARE OF CCA PROCUREMENTS

Source: NREL

Smart Grid System Report 2020 | Page 138

 Department of Energy |January 2022

Advanced Distribution Management System (ADMS) Applications and Market Growth

Figure 82 shows utility survey results for ADMS applications in use. Like many of the other
advanced systems, utilities are still in the early stages of implementing ADMS. Figure 83 shows
that while the ADMS market outlook indicates modest growth over the next couple of years,
investments in ADMS are anticipated to grow more quickly by 2022 and drive accelerated
market growth.

FIGURE 82. 2020 ESTIMATED UTILITY ADMS FUNCTIONS IN USE

Sources: Newton-Evans; North American Distribution Automation Market Assessment and Outlook: 2018-2020;
CAPEX 2020 Mid-Year: Outlook for Smart Grid Investment

Smart Grid System Report 2020 | Page 139

 Department of Energy |January 2022

FIGURE 83. ADMS U.S. MARKET OUTLOOK

Source: Newton-Evans

C. Challenges (Section V)

1. DEPARTMENT OF ENERGY RESEARCH AND DEVELOPMENT ACTIVITIES

Collectively, the DOE offices coordinate and carry out a wide range of applied energy research
and development (R&D) directly related to smart grid technologies or drivers. The list in
Table 13 describes categories of R&D within each of the six offices focusing on electric grid
technology.

TABLE 13. APPLIED ENERGY R&D FOCUS AREAS

Office R&D Focus Area

Energy Efficiency and Renewable • Vehicle technologies
Energy (EERE) • Hydrogen and fuel cell technologies
• Solar energy
• Wind energy
• Water power
• Geothermal technologies
• Advanced manufacturing (energy efficiency)
• Building technology
Electricity (OE) • Transmission reliability
• Resilient distribution systems
• Energy storage
• Transformer resilience and advanced components

Smart Grid System Report 2020 | Page 140

 Department of Energy |January 2022

Office R&D Focus Area

Cybersecurity, Energy Security, and • Cybersecurity for energy delivery systems
Emergency Response (CESER)
Advanced Research Projects Agency • Transportation: energy conversion, fuel, network, storage, and
– Energy (ARPA-E) vehicles
• Electricity generation and delivery: generation, storage, grid, and
distributed energy resources (DER
• Efficiency: resources, manufacturing, electrical, and building
Fossil Energy (FE) • Advanced coal energy systems and carbon capture, utilization,
and storage
Nuclear Energy (NE) • Nuclear energy enabling technologies
• Reactor concepts research, development, and demonstration
(RD&D)
• Advanced reactors demonstration program
• Versatile reactor design

2. STANDARDS
Industry communication and common information mode (CIM) standards are crucial for
enabling data flows between smart grid devices and systems. Standard development continues
in this area such as Institute of Electrical and Electronics Engineers (IEEE) P2030.102.1, which is
an interoperability standard using internet protocol security. Table 14 shows an overview of
draft and active standards related to communication and CIM. Table 15 shows standards
related to DERs and inverter-based resources.

Smart Grid System Report 2020 | Page 141

 Department of Energy |January 2022

TABLE 14. COMMUNICATION AND COMMON INFORMATION MODEL STANDARDS

Standard Description
IEEE P2030.102.1 Draft standard for interoperability using Internet Protocol Security (IPsec)
utilized within utility control centers
IEEE C37.236 Power System Protective Relay Applications Over Digital Communication
Channels
IEEE C37.118.2-2011 Synchrophasor Data Transfer for Power Systems
IEEE 1615-2019 Practice for Network Communication in Electric Power Substations
IEEE 1711.2-2019 Secure SCADA Communications Protocol (SSCP)
IEEE 1815-2012 Electric Power Systems Communications-Distributed Network Protocol (DNP3)
IEEE 2030.5-2018 Smart energy profile application protocol, one of the three protocols approved
by IEEE 1547
IEEE 1815.1-2015 Exchanging Information Between Networks Implementing IEC 61850 and IEEE
Std 1815
IEEE C37.238-2017 Standard Profile for Use of IEEE 1588 Precision Time Protocol in Power System
Applications
IEC 61850-5: 2013 Communications requirements for functions and device models
IEC 61850- Configuration language for communication in electrical substations related to
6:2009+AMD1:2018 IEDs
IEC 61850-7 series:2011 - Basic communication structures: principles and models, abstract communication
2019 service interface, common data classes, compatible logical node classes and data
classes, hydroelectric mover plants, DER logical nodes
IEC 61850-8- Specific communication service mapping (SCSM) – Mappings to ISO 9506-1, ISO
1:2011+AMD1:2020 9506-2, and ISO/IEC 8802-3
IEC 61850-9- Specific communication service mapping (SCSM) – Sampled values over ISO/IEC
2:2011+AMD1:2020 8802-3
IEC/IEEE 61850-9-3:2016 Precision time protocol profile for utility automation
IEC TR 61850-90-1:2010 Use of IEC 61850 for the communication between substations
IEC TR 61850-90-2:2016 Using IEC 61850 for communication between substations and control centers
IEC TR 61850-90-3:2016 Using IEC 61850 for condition monitoring diagnosis and analysis
IEC TR 61850-90-5:2012 Use of IEC 61850 to transmit synchrophasor information according to IEEE
C37.118

TABLE 15. DISTRIBUTED ENERGY RESOURCE AND INVERTER-BASED RESOURCE STANDARDS

Smart Grid System Report 2020 | Page 142

 Department of Energy |January 2022

Standard Description
IEEE 1547-2018 DER interconnection and interoperability standard
IEEE 1547.1-2020 Standard conformance test procedures for DER
IEEE P1547.2 Draft application guide IEEE 1547-2018
IEEE P1547.3 Draft guide for DER cybersecurity
IEEE 1547.4-2011 Islanded systems (microgrid) design, operation, and integration guide
IEEE 1547.6-2011 Recommended practices for interconnecting DERs with secondary networks
IEEE 1547.7-2013 Guide for conducting distribution impact studies
IEEE P1547.9 Guide for energy storage systems
Draft standard for interconnection and interoperability of inverter-based resources
IEEE P2800
interconnection with transmission systems

International Council on Large Electric Systems Efforts (CIGRE)

A selection of CIGRE working groups formed in 2019 and 2020 include the following focus areas.
These topics indicate where further industry R&D or standardization might be needed.

• Wide Area Monitoring Protection and Control Systems – Decision Support for
System Operators (TOR-WG C2.18).
• Condition Health Monitoring and Predictive Maintenance of HVDC Converter
Stations (TOR-WG B4.89).
• Experiences and Trends Related to Protection Automation and Control Systems
Functional Integration (TOR-WG B5.73).
• Technology and Applications of Internet of Things in Power Systems (TOR-WG
D2.53).
• Artificial Intelligence Application and Technology in Power Industry (TOR-WG D2.52).
• Enhancing Overhead Line Rating Prediction by Improving Weather Parameter
Measurements (TOR-WG B2-79).
• Protection, Automation and Control Systems Communication Requirements for
Inter-Substation and Wide Area Applications (TOR-WG B5.71).
• Interoperability in HVDC systems based on partially open-source software (TOR-
WGB4.85).
• Flexible AC Transmission Systems (FACTS) controllers’ commissioning, compliance
testing, and model validation tests (TOR-WG B4.83).
• Electric power utilities’ cybersecurity for contingency operations (TOR-WG D2.50).
• Augmented reality - Virtual reality to support Operation and Maintenance in Electric
Power Utilities (TOR-WG D2.49).
• Electric Vehicles as DER systems (TOR-WG C6.40).

Smart Grid System Report 2020 | Page 143

 Department of Energy |January 2022

• Requirements for Asset Analytics data platforms and tools in electric power systems
(TOR-WG C1.43).

3. CYBERSECURITY

Cybersecurity Research and Development CESER R&D Spotlight – DarkNet

for a Modern Grid DarkNet is designed to effectively shield the
For more than a decade, DOE’s Cybersecurity nation’s critical infrastructure assets from
for Energy Delivery Systems (CEDS) R&D disruptive cyber and cyber-physical penetration
program has partnered with the electric via public and commercial communication
sector to advance R&D designed to reduce networks. To accomplish this, DarkNet is
developing and implementing a highly secure,
cyber risks to electric system infrastructure.3
resilient, communication architecture that
CEDS continues to conduct R&D within DOE’s
includes critical information technologies,
Office of Cybersecurity, Energy Security, and sensing, and advanced cybersecurity solutions.
Emergency Response (CESER), established in The DarkNet phase-two project includes these
2018. CEDS brings together a diverse mix of key elements:
National Laboratories, vendors, energy
• Expansion and field validation of the
companies, and industry associations to
developed communications networks
develop tools and technologies to prevent, based on existing optical fibers
detect, mitigate, and survive cyber incidents. • Development and validation of
Through this work, CEDS has delivered more hardware and software sensing
than 47 products, tools, and technologies to technologies for the rapid detection of
reduce energy sector cyber risk. 4 More than anomalies
1,500 utilities in all 50 states have purchased • Signature library incorporating real-time
products developed under CEDS research. data feeds from sensors in the field to
Approximately 57 percent of U.S. electric enable artificial intelligence and
customers are served by electric providers machine learning
participating in CEDS R&D.

Currently, CESER is funding active cybersecurity R&D projects for modern grid systems on topics
including DarkNet (see sidebar), attack detection, isolation of automated systems, self-healing
grids, and security frameworks for power grid applications. 5

CESER is also a contributing partner to the Department of Energy’s Grid Modernization Initiative
(GMI, which invested in approximately 20 projects focused on security challenges of the electric
power system through the 2019 Grid Modernization Lab Call (GMLC. The GMLC is focused on
delivering near-term solutions within 18–24 months and is co-sponsored by industry through a
20 percent cost-share on the projects in the portfolio.

Frameworks, Tools, and Standards for Cyber-Physical Security

DOE, National Institute of Standards and Technology (NIST), North American Electric Reliability
Corporation (NERC), and electricity industry groups are all active in developing tools and
approaches for managing cybersecurity risks in the energy sector. The results of this work

Smart Grid System Report 2020 | Page 144

 Department of Energy |January 2022

include models, frameworks, and standards available to organizations in the electric sector. This
section covers some notable efforts to guide organizations toward more robust cyber practices.
Standards development processes are typically lengthy, while cybersecurity risks can evolve
rapidly.

Additional focus on advancing and harmonizing cybersecurity standards is needed to keep pace
with the evolving threats, especially in fast-moving areas such as IoT. 6 Further, utility and
vendor adaption of available standards needs an increased focus moving forward.
Organizations’ budgets for hiring and training cyber employees is a barrier to standards
implementation. Nonutility ownership and control of assets increasingly crucial to grid
reliability (e.g., DER, energy storage) poses yet another challenge for end-to-end cybersecurity.
Third-party system integrations with utility systems offer an entry point for cyber intrusions,
and third-parties are not mandated to comply with standards at the same level as utilities.

National Institute of Standards and Technology Cybersecurity Framework

NIST developed a Framework for Improving Critical Infrastructure Cybersecurity (Cybersecurity

Framework). 7 The framework provides a systematic process for organizations to identify,
assess, and manage cybersecurity risk. NIST’s original mandate to develop the framework came
from Executive Order (EO) 13636, “Improving Critical Infrastructure Cybersecurity” (February
2013) and was later formalized under the Cybersecurity Enhancement Act of 2014 (CEA). The
framework has continued to evolve according to CEA, and Version 1.1 was released in April
2018. NIST’s earlier framework efforts to develop NISTIR 7628 a decade ago are still viewed as
useful industry guides. Figure 84 describes the core functions of NIST’s cybersecurity
framework.

Smart Grid System Report 2020 | Page 145

 Department of Energy |January 2022

FIGURE 84. NIST CYBERSECURITY FRAMEWORK CORE FUNCTIONS

Image adopted from National Institute of Standards and Technology, Framework for Improving Critical
Infrastructure Cybersecurity, Version 1.1 8

Department of Energy Cybersecurity Capability Maturity Model

DOE worked closely with the energy industry to develop the Cybersecurity Capability Maturity
Model (C2M2) in 2014. The C2M2 has become one of the most important tools for energy
sector organizations to assess their cybersecurity posture. The C2M2 provides a sector-specific
tool to help organizations—regardless of size, type, or operations—evaluate, prioritize, and
improve their own cybersecurity capabilities. The energy sector and DOE worked to map the
model to the NIST Cybersecurity Framework, enabling utilities to use the C2M2 as a sector-
specific approach to implement the Framework. DOE is now working with the energy industry
to update the model and release Version 2.0, slated for 2021.

North American Electric Reliability Corporation Critical Infrastructure Protection and

Other Cybersecurity Standards

NERC Critical Infrastructure Protection (CIP) Reliability Standards are part of protecting the bulk
power system. NERC standards are used to bolster cybersecurity controls and clarify
compliance activities in relation to the physical security of cyber systems, system security
management, incident reporting, and recovery plans for cyber systems. They are being
consistently revised to deal with emerging issues. NERC is developing a new standard (2019-02)
to clarify requirements related to access to bulk system cyber information.

On June 24, 2020, the Federal Energy Regulatory Commission (FERC) issued a notice 9 seeking
comment on potential enhancements to NERC CIP Reliability Standards. The notice specifically

Smart Grid System Report 2020 | Page 146

 Department of Energy |January 2022

seeks input on whether currently effective CIP Reliability Standards adequately address:
(1) cybersecurity risks pertaining to data security, (2) detection of anomalies and events, and
(3) mitigation of cybersecurity events. In addition to these CIP Reliability Standards focus areas,
FERC is also seeking feedback on the potential risks of a coordinated cyberattack on
geographically distributed assets and whether this warrants FERC action.

Table 16 below shows a summary of active smart grid cybersecurity guidelines and standards
from NIST, NERC, the International Electrotechnical Commission (IEC), and IEEE.

TABLE 16. CYBERSECURITY GUIDELINES AND STANDARDS RELATING TO SMART GRID

Organization Standard Title/Purpose

NIST NIST SP 7628 (2010) Guidelines for Smart Grid Cybersecurity
NIST SP 800-82 (2015) Guide to Industrial Control Systems Security
NIST SP 1108r3 (2014) NIST Framework and Roadmap for Smart Grid Interoperability
Standards, Release 3.0
NIST SP 800-12 (2017) Introduction to Computer Security: the NIST Handbook
NIST SP 800-53 (2020) Security and Privacy Controls for Information Systems and
Organizations
IEC IEC 62351-3:2014+ Communications network and systems security including
AMD1:2018+ AMD2:2020 transmission control protocol/Internet protocol (TCP/IP)
IEC 62351-4:2018+ Data and communications security including Manufacturing
AMD1:2020 Message Specification (MMS)
IEC 62351-6:2020 Data and communications security for IEC 61850
IEC 62351-7:2017 Data and communications security for network and system
management
IEC 62351-8:2020 Role-based access controls
IEC 62443 series: 2009- Series of standards to secure industrial automation and
2020 control systems, building on the IEC/ISO 27000 series.
IEEE IEEE P1547.3 Draft IEEE Guide for Interoperability and Cybersecurity of
Distributed Energy Resources Interfaces with Associated
Electric Power Systems
IEEE C37.240-2014 IEEE Standard Cybersecurity Requirements for Substation
Automation, Protection, and Control Systems
IEEE 1686-2013 IEEE Standard for Intelligent Electronic Devices Cybersecurity
Capabilities
IEEE C118 series of Data management and protection of synchrophasors
standards
IEEE 1711.2-2019 IEEE Standard for Serial SCADA Protection Protocol for
Substation Serial Link Cybersecurity
IEEE P1711.1 Draft standard for cryptographic protocol for cybersecurity of
substation serial links: substation security protection protocol
IEEE C37.118.2-2011 Synchrophasor Data Transfer for Power Systems
NERC CIP-002-5.1 (2015) Bulk Electric System Cyber System Categorization
CIP-003-6 (2014) Security Management Controls

Smart Grid System Report 2020 | Page 147

 Department of Energy |January 2022

Organization Standard Title/Purpose

CIP-004-6 (2014) Personnel & Training
CIP-005-5 (2012) Electronic Security Perimeter(s)
CIP-006-6 (2014) Physical Security of BES Cyber Systems
CIP-007-6 (2014) System Security Management
CIP-008-5 (2012) Incident Reporting and Response Planning
CIP-009-6 (2014) Recovery Plans for BES Cyber Systems
CIP-010-2 (2015) Configuration Change Management and Vulnerability
Assessments
CIP-011-2 (2015) Information Protection
CIP-013-1 Supply Chain Risk Management
CIP-014-2 (2015) Physical Security

4. CYBERSECURITY INFORMATION SHARING PROCESSES AND PRACTICES

Department of Energy and Energy Industry Information Sharing Mechanisms

In collaboration with DOE and the Electricity Subsector Coordinating Council (ESCC), the
Electricity Information Sharing and Analysis Center (E-ISAC) serves as the primary cybersecurity
communications channel for industry and enhances the ability to prepare for and respond to
cyber and physical threats, vulnerabilities, and incidents.

The E-ISAC operates the voluntary, subscription-based Cybersecurity Risk Information Sharing
Program (CRISP), which facilitates timely sharing of data from utility IT systems to government
analysts, who conduct classified and unclassified analysis to detect potential threats and deliver
reports and alerts to energy utilities. 10 Originally developed by CESER in 2014, CRISP
participants now account for utilities serving around 75 percent of all U.S. electric customers.

CESER is now working with the energy industry to expand data sharing to operational
technology (OT) systems and enhance analysis with U.S. intelligence insights to detect and
mitigate targeted attacks on energy operational systems. The Cyber Analytic Tools and
Techniques 2.0 (CATTTM 2.0) program is designing an information sharing and analysis platform
that will address both operational technology (IT) and OT infrastructure data. CATT 2.0 is
building on CESER’s Cybersecurity for the Operational Technology Environment (CyOTETM)
program, which is developing analytic tools and procedures to increase detection capability for
proactive indicators of attack associated with cyberattacks on OT networks.

U.S. Department of Homeland Security Information Sharing Mechanisms

The DHS Cybersecurity and Infrastructure Security Agency (CISA) is the lead federal department
for the protection of critical infrastructure and furthering of cybersecurity. CISA has
implemented several programs to share cyber threats and risk information with the private
sector and state, local, tribal, territorial, and international entities. 11 Programs include the
National Cybersecurity and Communications Integration Center (NCCIC), including Industrial

Smart Grid System Report 2020 | Page 148

 Department of Energy |January 2022

Control Systems Cyber Emergency Response Team (ICS-CERT). 12 ICS-CERT helps provide
information and expertise and helps build risk awareness, advising people on how to
understand threats and vulnerabilities. ICS-CERT issues alerts, advisories, reports, and technical
information papers. An example is the Coordinated Vulnerability Disclosure (CVD), 13 which
helps communicate and mitigate vulnerabilities with ICS and Internet of Things (IoT) devices,
including those that could impact smart grid security.

CISA unveiled a plan for staying ahead of grid hackers in July 2020, focusing efforts on industrial
control systems underlying grid operations.14 According to CISA’s director, “In recent years, we
have seen industrial control systems around the world become a target for an increasing
number of capable, imaginative adversaries aiming to disrupt essential services.” In response,
the five-year roadmap seeks to “actively pursue new ways to outpace our adversaries and
elevate ICS security and resilience as a national priority” through a joint venture between
government, the private sector, and academia. Figure 85 shows the four pillars of CISA’s
initiative to secure ICS.

FIGURE 85. CISA’S SECURING INDUSTRIAL CONTROL

SYSTEMS: A UNIFIED INITIATIVE FY2019-2023

Source: DHS

5. WORKFORCE DEVELOPMENT
The following initiatives are underway to build and adapt the electricity industry workforce
pipeline.

Smart Grid System Report 2020 | Page 149

 Department of Energy |January 2022

K-12 and University-Level Education

The Consortium of Universities for Sustainable Power (CUSP) was formed in 2006, with 235
U.S. universities as members, and has an electric energy systems (undergraduate and graduate)
course content on its website.15 The curriculum is developed by experts in their respective
fields and is open source. CUSP was created with funding from the National Science
Foundation, Office of Naval Research, National Aeronautics and Space Administration, and the
Electric Power Research Institute (EPRI).

The National Energy Education Development (NEED) project was launched by a congressional
resolution in 1980 and continues to further the mission of promoting an energy-conscious and
educated society. The NEED project provides a curriculum on a range of energy topics including
energy transformations, energy sources, electricity, transportation fuels, and energy efficiency
and conservation. More than 65,000 classrooms nationwide currently use NEED program
resources. 16

Through its GridEd initiative, EPRI has partnered with seven universities to form the GridEd
collaborative educational initiative. The partner universities developed 10 new courses and
modified 19 at both graduate and undergraduate levels based on identified gaps in power
engineering curricula since 2013.

Courses studied by students include power systems analysis, power electronics, IoT for grid
modernization, and market operation of power systems. GridEd’s student innovation board
(SIB) consists of 13 universities and 41 student leaders from partner and affiliate universities.
Partner universities have conducted outreach efforts, including the development of energy
pathway curricula, seminars for high school students, and educational materials for middle
school students.

Growing the Utility Workforce

In October 2018, DOE’s Solar Energy Technologies Office (SETO) announced that it would
provide $7.9 million to seven projects focused on developing the solar workforce for the
industry’s future needs. The projects were kicked off in June 2019. 17

DOE’s Wind Energy Technologies Office has several initiatives in place to train and encourage
participation in the wind industry, including: 18

• The Wind Energy Workforce and Education Summit

• Wind for Schools Project
• Collegiate Wind Competition
• North American Wind Energy Academy
Over the past decade, the Center for Energy Workforce Development (CEWD) has undertaken
several initiatives to grow the utility workforce and to close a skills gap in occupations such as
line workers, technicians, and operators. CEWD has developed the National Energy Education
Network (NEEN). NEEN is a consortium of over 200 high schools, community colleges, and

Smart Grid System Report 2020 | Page 150

 Department of Energy |January 2022

universities that have partnered with CEWD members to build education pathways that lead to
the skills and competencies for the future grid. Other CEWD initiatives include: 19

• Identifying critical jobs threatened by the impending retirements of older employees.

• Determining the key skills required in jobs with the changing nature of technology
• Specifying credentials.
• Developing educational tools, curricula, and training toolkits in mathematics and
problem solving.
• Documenting best practices for energy employers to engage with educators and
teachers.

Preparing the Workforce for Cyber Threats

Cybersecurity workforce development is a national priority outlined in the President’s National
Cyber Strategy and Executive Order on America’s Cybersecurity Workforce (Executive Order
13870).

Through its CyberForce Competition, DOE seeks to identify and develop the next generation of
cybersecurity professionals to secure the nation’s critical energy infrastructure.

In November 2019, DOE held its fifth CyberForce Competition hosted by 10 National
Laboratories, which featured a professional-level pilot that included scoring to be considered in
identifying highly qualified individuals for potential placement at DOE. In 2019, 105 collegiate
teams from 32 states and Puerto Rico participated in the CyberForce Competition, a nearly 67
percent increase in participation over the previous year’s 63 teams from 24 states and Puerto
Rico.

A final draft of NIST’s National Initiative for Cybersecurity Education (NICE) Cybersecurity
Workforce Framework is planned for release in November 2020. 20 First published in August
2017, the framework applies across the public, private, and academic sectors. 21 NIST developed
a range of cybersecurity guides that complement the framework.

Smart Grid System Report 2020 | Page 151

 Department of Energy |January 2022

Section End

1
U.S. Environmental Protection Agency, Community Choice Aggregation, 2020. Available online at:
https://www.epa.gov/greenpower/community-choice-
aggregation#:~:text=Community%20choice%20aggregation%20(CCA)%2C,service%20from%20their%20existing%2
0utility.
2
CPUC, Decision on Central Procurement of the Resource Adequacy Program, Rulemaking 17-09-020, June 11,
2020. Available online at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M339/K814/339814622.PDF.
3
U.S. DOE, Cybersecurity for Energy Delivery Systems (CEDS) R&D Program, From Innovation to Practice: Re-
designing Energy Delivery Systems to Survive Cyber Attacks, July 2018, available online at:
https://www.energy.gov/sites/prod/files/2018/09/f55/CEDS%20From%20Innovation%20to%20Practice%20FINAL_
0.pdf.
4
US DOE, Cybersecurity Research, Development and Demonstration (RD&D) for Energy Delivery Systems. Available
online: https://www.energy.gov/ceser/activities/cybersecurity-critical-energy-infrastructure/cybersecurity-
research-development-and.
5
Cybersecurity for Energy Delivery Systems (CEDS) Fact Sheets. Available online at:
https://www.energy.gov/ceser/cybersecurity-energy-delivery-systems-ceds-fact-sheets.
6
Cyberwatching.eu, Cybersecurity Standards Gap Analysis, October 2018. Available online at:
7
National Institute of Standards and Technology, Cybersecurity Framework, Version 1.1, April 16, 2018, Available
online at: https://cyberwatching.eu/sites/default/files/White-Paper-Cybersecurity-Standard-Gaps-
Analysis_Cyberwatching.eu-October2018.pdf https://nvlpubs.nist.gov/nistpubs/CSWP/NIST.CSWP.04162018.pdf.
8
National Institute of Standards and Technology, Cybersecurity Framework, Version 1.1, April 16, 2018, Available
online at: https://nvlpubs.nist.gov/nistpubs/CSWP/NIST.CSWP.04162018.pdf.
9
U.S. Federal Register, Potential Enhancements to the Critical Infrastructure Protection Reliability Standards, FERC,
June 24, 2020. https://www.federalregister.gov/documents/2020/06/24/2020-13618/potential-enhancements-to-
the-critical-infrastructure-protection-reliability-standards.
10
NERC, Electricity Information Sharing and Analysis Center. Available online at:
https://www.nerc.com/pa/CI/ESISAC/Pages/default.aspx.
11
CISA, Information Sharing and Awareness. Available online at: https://www.cisa.gov/information-sharing-and-
awareness.
12
CISA, Industrial Control Systems. Available online: https://www.us-cert.gov/ics.
13
CISA Coordinated Vulnerability Disclosure (CVD) Process. Available online at: https://www.cisa.gov/coordinated-
vulnerability-disclosure-process.
14
CISA, Securing Industrial Control Systems: A Unified Initiative. July 2020. Available online at:
https://www.cisa.gov/sites/default/files/publications/Securing_Industrial_Control_Systems_S508C.pdf.
15
Consortium of Universities for Sustainable Power. https://cusp.umn.edu/.
16
National Energy Education Development, P.E.E.P.2.0, Available online at:
https://www.need.org/programs/peco/.
17
SETO FY2018 – Workforce Initiatives.
18
Keyser, David, and Suzanne Tegen. 2019. The Wind Energy Workforce in the United States: Training, Hiring, and
Future Needs. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-73908. Available online at:
https://www.nrel.gov/docs/fy19osti/73908.pdf.
19
Kerr, William, Michael Norris, and Manjari Raman. CEWD: Closing the Skills Gap. Harvard Business School Case
818-081, February 2018. (Revised May 2019).
20
NICE Cybersecurity Workforce Framework Resource Center, Latest Updates. Available online at:
https://www.nist.gov/itl/applied-cybersecurity/nice/nice-cybersecurity-workforce-framework-resource-
center/latest-updates.

Smart Grid System Report 2020 | Page 152

 Department of Energy |January 2022

21
NIST, National Initiative for Cybersecurity Education (NICE) Cybersecurity Workforce Framework, August 2017.
Available online at: https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-181.pdf.

Smart Grid System Report 2020 | Page 153

 Department of Energy |January 2022

Smart Grid System Report 2020 | Page 154