Planning for the future or the past? Striking the balance between robust and nimble planning
Utility planners are facing increasing challenges and it’s tempting to conclude that the answer is ever-more complex models that co-optimize across a larger number of variables to undertake ever-more sophisticated analyses of the system. There is certainly a need and a value in new tools and new approaches, but their complexity should be balanced against attendant impacts on objectives like agility and transparency. The pace of change is accelerating, and planning needs to keep up.
Increasing Challenges
Planners face a host of challenges, both to continue meet traditional planning objectives, but also to plan for new system needs. The growing number of sources of uncertainty and the increased magnitude in those uncertainties certainly place a strain on traditional planning approaches. The continued growth of non-dispatchable resources like variable renewable energy and the expanding contribution of distributed resources introduce ever-broader set of possible outcomes that planners need to consider as they plan for infrastructure that can meet traditional metrics like reliability, safety and security. This places strains on the ability of deterministic methods to deliver optimal solutions to inform planning decision.
But in addition to traditional planning criteria, utilities now need to plan for new needs like flexibility requirements of the system to mitigate the impacts of resource variability and the resilience of the system to better prepare for and recover from high-impact low-frequency events. This is challenging both because requirements like flexibility and resilience don’t fall neatly into traditional approaches for meeting reserve margins and planning for contingencies, and because solutions can come from many different sources. System flexibility can come from a combination of flexible generators, energy storage systems, load flexibility and geographic diversity. Similarly, system resilience relies on bulk power system resilience but also community-scale and point solutions including those implemented by individual customers.
The conclusion might be that we need ever-more sophisticated tools that can optimize over smaller characteristic timescales, longer planning horizons and broader geographic extent. That we need to co-optimize from 765kV down to 220V across distribution, generation, transmission as well as customer solutions. That we need to solve for these solutions in a probabilistic, risk-adjusted way that identifies the optimal investment mix that maximizes value to customers.
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We will need some of that. Certainly, many combinations of those discrete elements are already in development. But it is critical to temper the desire for complexity with the value of simplicity. To the extent that planning underpins the utility investment cycle, agility is essential to ensure that planning outputs keep pace with technological change, cost dynamics and consumer shifts. The pace at which these are evolving continues to accelerate and that implies a need for faster, more nimble planning over shorter planning cycles that can adapt quickly to the impacts of change across all of these dimensions.
The pursuit of new approaches should not be done at the expense of producing a plan within a timescale that can meaningfully drive investment in innovative approaches. Increased granularity and complexity should be pursued in the context of the value of the outcome and with a clear-eyed view of the accuracy and precision of the inputs and assumptions that drive the results. The value of a plan reduces with time in terms of the relevance of the outputs and its ability to produce meaningful results.
Separately, multiple jurisdictions are finding value in increased transparency to enhance accountability and trust in the planning process. This also helps identify opportunities for more aligned planning across generation, transmission and distribution planning and enables policymakers and stakeholders to engage effectively in the process. This suggests the need for discrete analyses that can address specific questions rather than the need for an ever-more-expansive version of the proverbial black box.
Striking the right balance
The need for agility and transparency points to the need for faster analysis that can be conveyed simply to non-specialists. This does not mean “simplified planning” but rather “targeted complexity.” There is a need for advanced techniques and new methodologies to address new challenges, but that does not imply the need for end-to-end planning that co-optimizes across all variables and solutions. There is a opportunity to apply judgement based on experience that enable well-informed models that don’t move to a geometric expansion of variable and constraints. Moving to ever-more-complex ensembles of tools will only ensure that planning outcomes are out of date before the analysis is complete. This suggest striking a balance between analytically robust results and enabling agility and transparency in the process. The pace of change is accelerating. Utilities will need a planning paradigm that can meet the challenge of keeping up with that change in order to continue to meet the prospective needs of its customers.