When you shop for groceries, you’ll likely consider how many meals you need to make, who you’re cooking for and what you want to eat, all while finding the best price for each item on your list.
Creating a resource plan for energy generation is kind of like making that grocery list. Energy companies must ensure there’s enough energy, keep costs manageable for customers and meet environmental goals. How do they achieve this? It takes some planning.
Step 1: Anticipating the future
When you make your grocery list, you might start by thinking about the meals you want to eat in the upcoming week. Several things might impact your meal ideas like prep time, cook time, an unscheduled trip to your favorite restaurant or who’s dining with you.
Energy companies can’t know the future, but they do have tools to ensure the energy resource mix will do well in a variety of future scenarios. Using modeling software, they can input different factors that influence these unknown futures, such as:
- Business and population growth.
- Changing electrification needs, for instance as more electric vehicles hit the road.
- Technological advancements like customer-hosted solar and battery systems.
- Changes in fuel prices for coal and natural gas.
Additionally, companies factor in changing regulations, such as emissions limits or incentives for renewable energy like the Inflation Reduction Act. By considering these variables, they can develop flexible plans that won’t become obsolete as the world evolves.
Step 2: Modeling scenarios
Once they have a grasp of potential future landscapes, energy companies use computer modeling programs to solve for a least-cost solution across large regions of the electrical system. The solutions show what the future energy mix might look like for each future scenario. This helps them understand how energy prices could change and what types of generation resources, like coal, natural gas or renewables, might be most beneficial in each situation.
Using these programs is like reviewing potential recipes you might want to incorporate into your plan for next week’s grocery shopping.
Step 3: Optimizing the portfolio
Once you decide what meals you’ll make, you might check your cupboards and fridge to see what ingredients you already have and which you need to add to your list.
With an eye on their existing energy generation portfolio, energy companies evaluate which resources might be the most efficient and effective going forward. This could include retiring aging generating facilities or investing in more renewable resources or natural gas.
They also consider the growing importance of energy storage, which doesn’t generate energy itself, but rather helps shift energy to times when it is most needed, improving grid stability and efficiency. For example, innovations in long-duration energy storage, such as the Energy Dome, might play a large role in ensuring reliability in a renewable forward energy grid.
The goal of optimizing is to ensure energy companies provide a reliable service while keeping customer costs low. Using a diverse mix of generation sources is key and helps make the grid flexible as each source has its own set of favorable characteristics. For example, renewable sources offer environmental benefits and fuel cost savings, however natural gas and coal provide a stable base of energy 24/7.
Step 4: Development and feasibility
With your grocery list assembled, it’s time to head to the supermarket, gather all the items you need and prepare to make the meals on your list.
Once the resource plan is outlined, energy companies work to turn the plan into reality. They identify suitable locations for new resources, consider factors like brownfield versus greenfield sites, work to achieve necessary regulatory approvals and perform environmental impact assessments. Collaboration with local governments and communities is crucial to ensure plans align with local interests.
The goal of resource planning is to strike a balance between cost-effectiveness, reliability and sustainability. By following these steps and adapting to changing circumstances, energy companies ensure the lights stay on, bills remain reasonable and the planet is better protected.
Learn more about our resource plan, the Clean Energy Blueprint, here.