Grid 2.0 What is it!


The electric grid is entering a rapid state of transition. The current grid delivers less than 1/5th of the total energy needs of customers and with the shift to clean energy, that share will increase dramatically.

Utility planners are quick to explain that grid design is complex and must meet important criteria:

  • Deliver the annual peak demand, with redundancy to allow for the loss of a single critical component at peak demand without an overall failure.
  • Supply demand balance must be maintained continuously in real time.

The current grid design has very little available capacity during peak periods.

As fossil fuel loads are electrified, more electrical power and energy will be needed. Estimates suggest that a 3x electrical energy will be required. That will be challenging, as grid additions can be slow and costly to install. New technology to enable this growth will be valuable.

Loss will also be an issue. Average delivery loss in the US is about 7%, and if delivered capacity is doubled, the loss may increase by up to 4x. (Loss increases with the square of electrical current) With current annual US losses valued at $19B, there will be real value in managing and optimizing loss.

Today, Generac has both the technology and the skills to contribute value, both in added capacity/energy delivery and in loss management.

Delivering More Energy through the Existing Grid

The existing grid CAN deliver more energy and more power, but this requires changes in the ways that the system is planned and operated.

The basic grid design, which has existed for more than 100 years, is intended to meet customer demand when and where needed. The utility was designed to deliver power from central generation to loads. Until recently, any thought of distributed generation was simply not considered. The utility was established to meet customer demand, ensuring that the customer always receives quality power with reliability. This concept has two distinct requirements: acceptable quality (voltage, frequency, etc.) and reliability. The system must deliver quality electric power with reserve capacity to allow the loss of a critical transmission or generation element at peak without causing a system collapse.

Grid 2.0 can increase delivery of power and energy while ensuring that these requirements are maintained.

The average load on the grid is typically about 50% of the peak demand. More power could be delivered during off peak periods when there is little or no demand. A combination of load management and distributed storage can meet this need by increasing the average power delivery and storing surplus energy near the load site for later use.

The other issue is voltage management. In many cases, the limited capacity during peak conditions is caused by low voltage at the customer site. This voltage issue can be addressed with dynamic voltage management, another strength that Generac can provide.

Managing Demand

The mandate to “meet customer demand” has been a real challenge in some areas. The utility MUST maintain the supply demand balance on a continuous basis. If you turn on an air conditioner, one or more generators will increase their output levels to meet this capacity change. Consider an industrial arc furnace that can draw large amounts of power for very short periods. The utility must have capacity available to follow these changes continuously. Recently, large capacity solar and wind generation has been added to the grid. These sources have generally not been dispatched and may be intermittent requiring the same dynamic management as volatile loads, adjusting dispatched generation to follow the intermittent generation, in such a way that total demand and generation are continuously balanced. The balancing task has increased with the addition of intermittent generation.

Demand response systems appeared some years ago, specifically aimed at reducing the system demand during the daily peak, and thereby reducing the need to either start peaking generation or to purchase the needed capacity at peak prices.

With the inclusion of large amounts of intermittent generation, the issue has become more challenging, as both the supply and demand capacities are subject to intermittency. As renewable generation increases, and conventional generation decreases, the problem gets exponentially more difficult to manage.

The immediate solution to this is demand management – a step beyond demand response. There are many load devices that can be managed with little no impact on the users’ experience, and these are now being widely used. Systems may pre-heat hot water or pre-cool an air-conditioned building before the peak demand period to reduce the need for peak capacity. Much work has been done to optimize systems that provide this service.

The impact of this action is to reduce peak demand and shift some of the capacity to off peak periods. The immediate effect of this process is a benefit in another way that is less visible. Loss is reduced. The loss in the distribution system is proportional to the square of the current in the line. If one draws power at a constant rate, the loss will be significantly less than if one draws the same amount of energy over a period, but draws zero for half of the time, and double for the other half of the time. Demand management can reduce loss.

Managing Voltage and Loss

Lowering the peak and increasing the capacity factor (average demand/peak demand) makes room to deliver more energy. If the demand can be managed, ideally to have a capacity factor of 1.0, a line that was previously operating at a capacity factor of 0.5 could deliver 2x the energy that was delivered in the past, but this would result in an increase in loss of up to 4x. A distribution line that experienced loss of 4% might experience loss of up to 16% after this increase in capacity factor. Voltage and Loss management can play a large role in this area. Voltage management is the next frontier in Grid 2.0.

When load is increased on distribution systems, the limiting capacity is most often the low voltage limit that is breached as the demand increases. Utilities have used capacitor compensation to address this issue for many years. But in recent times, the capacitor compensation has resulted in a limited ability to connect rooftop solar and other renewable sources to existing distribution feeders because of high voltage issues. This has become a significant issue in Australia, where rooftop solar is popular. The solution is to utilize dynamic voltage control, to manage voltage on a continuous basis, similar to what is currently done in managing demand.

Dynamic voltage control, however, has other features that make it potentially highly valuable. The system can not only increase feeder capacity, and enable much more distributed generation to be connected, it can also manage and optimize loss, reducing it by about 1/3.

Dynamic voltage management has not been extensively used in the past because there was little need; there was almost no distributed generation on the grid. But with the changes that are now well under way, there is a rapidly growing demand for solutions that will enable the connection of more renewable capacity, while managing loss and increasing delivery capacity.

Generac has real strengths in this area, with proprietary control technology, and the use of Generac equipment, to be a strong leader in managing distribution operations.


The future grid may require physical additions, but new technology will provide a lower cost path to deliver more power, allowing time to implement longer-term projects for a robust grid that can continue to grow for the future.

Generac has the technology to meet these needs today, and this will be a valuable addition for utilities that are facing the rapid changes that are coming.

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