The reason we need to talk about power grids
The number one problem facing solar and wind is collapsing energy prices. Regions with good solar and wind are flooded with cheap, clean energy and prices drop. This is the biggest risk for new projects today. At the same time neighboring regions face high prices and continue to burn fossil fuels. The issue is a lack of sufficient transmission capacity.
Lack of transmission capacity
The best solar and wind resources are typically in remote locations where there are no or few transmission lines. Historically power lines were built to connect power plants and centers of demand. Most of the grid was built by the 1970’s and is thus not configured for distributed renewables.
This is also evident in the fact that renewable projects are struggling to obtain grid connections. In the US for example the average time it takes to connect to the grid has grown from 2 years a decade ago to over 5 years today (source).
The shortage of transmission capacity is already leading to solar and wind curtailment. In countries with lots of wind, congestion in power grids leads to around 10% of generated wind energy being lost. This is clean energy that is thrown away while fossil fuel plants continue operating.
The energy transition is only in the beginning
The progress towards clean electricity is accelerating, with 400GW of new solar PV installations in the year of 2023 for example. But all this progress of solar and wind is still barely visible in graphs showing all of humanity’s energy consumption. Today, energy overwhelmingly continues to mean fossil fuels. There is still a long way to go towards net zero.
The energy transition has barely started, but the grid is already struggling. To support a massive build-out of clean power a thorough reconfiguration and strengthening of the power grid is needed. BNEF estimates that $21.4 trillion needs to be invested in power grids globally by 2050 (source).
Yet in addition to the cost, it takes on average a decade to approve and build new transmission lines (source). Solar and wind developers can move much faster. The energy transition therefore is constrained by the build-out of power grids.
Dynamic Line Rating increases grid capacity by a third
What can be done now? The clearest vision comes from the German regulator in their network development plan - the NOVA principle (source). It means that the grid should first be optimized and only then reinforced or new lines built (Netz-Optimierung vor Verstärkung vor Ausbau). The quickest win is to utilize the existing assets as efficiently as possible.
Dynamic Line Rating (DLR) is a mature technology that can unlock up to 30% more capacity from the existing grid (source). High-voltage overhead lines are fundamentally limited by the risk of overheating. Power flowing through the line heats up the conductors and each line has a maximum temperature it can tolerate. But when it’s cold or windy the same power line can carry several times more power before overheating.
Grid operators regularly calculate the amount of power that they allow onto the network. Conventional methods rely on conservative assumptions. Typically grid operators assume the worst-case scenario of a hot, sunny, windless summer day. Most of the time weather conditions are in fact not as restrictive, so conventional methods lead to significant unused capacity.
Standard DLR solutions operate by providing grid operators with real-time monitoring of the carrying capacity of their power lines. This provides grid operators with the information they need to allow more power to be transmitted over the existing lines.
The German grid has experienced serious congestion over the past years with clean energy being in the north of the country and much of industry in the south. As a response Dynamic Line Ratings are part of the network development plan. Finland is similarly experiencing new wind generation in the north with most of demand being in the south. In the US, FERC has mandated grid operators to implement ambient-adjusted ratings by July 2025 to help utilize the grid more efficiently and reduce the price of energy for consumers (source).
Software-only solution
Grid Raven is improving Dynamic Line Rating technology by making it more accurate, resilient and scalable. With the help of machine learning our solution covers every span of the entire network, removing the need for sensors. There is no dependence on hardware so entire grids can be covered in one go. Our vision is to increase grid capacity globally by 30% by 2030.
Find out more about our solution in this link: https://www.gridraven.com/ferc-881
3,000 GW of renewables are waiting for a grid connection globally
Currently, there are over 3,000 GW of renewable projects globally that are waiting for a grid connection according to the International Energy Agency (source). For comparison, global installed renewable capacity in 2022 was 3,300 GW. If connecting to the grid happened as fast it did in the 2000s, then we would already have twice as much renewable capacity as we do.
Grid connections take increasingly more time
It takes increasingly longer to connect new projects, because renewables are already stretching the grid to its limits. In the US, in the early 2000s, a power plant was connected to the grid in less than two years' time. Nowadays, the connection times are longer than five years (source).
Generally speaking, today's power grid was built decades ago and has not evolved much since physically. It was not configured for renewable power, which is often located in far-away places. Each new project may require time consuming grid reinforcements.
Yet, the existing grid today is not being used to its maximum potential. There is a lot of potential for optimising the grid in the near-term, without requiring time-consuming refurbishments.
Grid Enhancing Technologies unlock grid capacity
The Rocky Mountain Institute recently published a report into Grid Enhancing Technologies (GETs) (source). The three GETs are Dynamic Line Ratings, Advanced Power Flow Controls and Topology Optimization. They analyzed the PJM region in North-Eastern United States and found that deploying thethree GETs would together enable the connection of an additional 6.6GW of clean power to the regional grid, at a fraction of the time and cost of traditional grid upgrades. This additional clean power would save consumers $1 billion per year in generation costs. For context, PJM has 183GW of generation capacity today and spends around $30 billion on generation (assuming $40/MWh generation cost).
"There is no shortage of interest in developing and accessing the increasingly low-cost, carbon-free generation that characterizes the vast majority of projects seeking connection to the grid today. There is, however, a shortage of grid capacity to accommodate this expansion of both generation and load." - quote from the RMI report.
The opportunity to accelerate clean power with Grid Enhancing Technologies is global. For example, Finland has seen high electricity prices in recent years, despite being right next door to Scandinavia's cheap, clean hydro. There is an opportunity to employ Grid Enhancing Technologies to bring more clean power from Scandinavia. Further, there is around 1 GW of solar power that is awaiting a grid connection in Finland. Dynamic Line Ratings could alleviate both of these constraints and thus lower the price of energy.
Forecasting grid capacity reduces electricity prices
Transporting cheap clean electricity
Electricity is cheap if there is plenty of transmission capacity in the grid (source). With lots of transmission capacity the cheapest power plant can always sell all of its power. Over the long term solar and wind will be built in the best places. The energy transition happens faster and everybody wins.
But transmission capacity is limited today. The quickest way to increase grid capacity is to maximise the usage of the existing power lines. Dynamic Line Rating has been shown to increase capacity by up to 30% on an annual basis.
However, that increase in grid capacity is in real time and not day-ahead. And this makes a world of a difference. Increasing grid capacity in real time helps reduce system operation costs for grid operators, but does nothing for power prices.
Energy markets operate day-ahead
Electricity is bought and sold day-ahead. Tomorrow’s price of electricity is determined today. It is only grid capacity that is opened up to the market for tomorrow that brings down power prices for people and industry.
How much cheap power Germany can import from Sweden and Norway obviously depends on the strength of the power lines connecting the countries. This needs to be known at least one day ahead. Dynamic Line Rating only helps reduce power prices if it is made available for tomorrow.
Physical sensors on power lines are great for grid operation in real time, but they fundamentally cannot forecast what tomorrow’s weather will be like. With physical sensors grid operators can reduce risk and save costs, but the effect on consumers’ energy bill is marginal at most.
Grid operators are tasked with operating the grid and ensuring there are no blackouts. It is not the primary task of grid operators to ensure cheap energy for consumers. Of course therefore DLR applications focus on reducing system operation cost, not the price of electricity.
Forecasting Dynamic Line Ratings to reduce energy prices
Clean energy can only proceed if renewable projects pay back their investment. Forecasting Dynamic Line Ratings for day-ahead power markets significantly help smooth out power prices between regions. In the process consumers benefit from lower prices overall and renewable developers earn back their investment.
To bring a real-world example, in the case of Elia in Belgium, Dynamic Line Ratings were implemented a decade ago to help reduce the risk of blackouts one winter. Transmission capacity from France and the Netherlands was increased with the help of DLR sensors. Inspired by this success the Belgian regulator required Elia to continue offering additional grid capacity also on day-ahead markets so that consumers can benefit from lower prices. Other regulators should follow suit!
Offshore wind farm photo by Nicholas Doherty on Unsplash