Expanding the Possibilities: When and Where Can Grid-Enhancing Technologies, Distributed Energy Resources, and Microgrids Support the Grid of the Future?

Achieving the ambitious decarbonization goals established by the Biden administration, 100 percent clean electricity by 2035 and a net-zero emissions economy by 2050, requires substantially increasing the share of clean and renewable energy resources in the electricity generation mix. To reach these decarbonization targets cost-effectively, renewable power will need to grow to multiples of current levels. The transmission system is not equipped to handle the anticipated substantial increase in power flows; its lack of capacity and availability leads to grid congestion, which causes higher energy prices and curtails renewables. Moreover, with the anticipated electrification of the economy leading to large increases in future demand, the burden on the power grid is ever increasing. A report from the REPEAT project estimates that to take full advantage of the subsidies offered in the Inflation Reduction Act (IRA), transmission capacity must grow by about 2.3 percent per year, more than double the rate of the past 10 years (Jenkins et al. 2022).Nevertheless, getting new projects built can take over a decade due to the complexities involved in their planning, siting, and permitting. State and federal policymakers have acknowledged this challenge and taken steps to support the buildout of new transmission. The Infrastructure Investment and Jobs Act (IIJA) and IRA carved out support for transmission expansion, allocating $12.5 billion and $5 billion, respectively. Furthermore, the Biden administration recently announced plans to streamline the federal permitting process for transmission lines through the Department of Energy (DOE) to facilitate buildout. Nonetheless, experts are still skeptical that we can build enough new transmission in time to support the shifting generation mix and increasing electrification to meet climate targets.However, building new lines is not the only way to bolster resilience, reliability, and affordability. Several different types of investments can deliver similar outcomes. Grid-enhancing technologies can increase the capacity of existing lines, distributed energy resources can spread out generation resources so they are closer to load centers, and microgrids can use on-site power generation to support pockets of load and insulate campuses or communities from issues on the broader grid. These solutions can deliver benefits, but each is best suited to a specific set of circumstances and faces its own technical and regulatory barriers to implementation.This report surveys the literature on different types of grid solutions. We discuss how the technologies work, in what circumstances they may act as substitutes for transmission expansion, evidence of their impact, and challenges (both technical and regulatory) in implementing them. New lines will undoubtedly be an important piece of the energy transition, but exploring these additional types of investments can help us understand where and when lower-cost and more rapidly deployed alternatives can provide solutions to some of our transmission woes.