- Non-Wires Alternative
- Integrated Distributed Energy Resources
- Con Ed
- Demand Side Management
Deciphering the Next Decade of Non-Wires Alternatives
From distribution deferral opportunities in California to grid modernization efforts in Washington, DC, non-traditional grid upgrade requirements are leading more utilities to explore non-wires alternatives (NWA). Guidehouse Insights is tracking over 100 NWA projects across the US, and updated models suggest the US alone is anticipated to spend $333 million on these projects by 2028. Alongside this growth, these projects developed a variety of names, including non-wires solutions, non-transmission alternatives, and non-pipes solutions where natural gas infrastructure is involved.
Where NWA are embraced, they represent a dynamic and changing utility business model. Such projects call on distributed energy resources (DER) such as solar, storage, distributed generation, energy efficiency, and demand response, which can be developed individually or in a portfolio. These provide a peak demand or reliability solution without the construction of new transmission or distribution lines or substation infrastructure.
Deployment Acceleration Despite an Uneven Landscape
NWA’s growing popularity in some regions of the country outpaces others, and most states have not acted on NWA proceedings or screening criteria. Comprehensive legislative or regulatory policies exist only in California, New York, Vermont, Minnesota, and Nevada and do not always equal action. Vermont set the stage as the first state to establish a regulatory framework surrounding NWA, yet projects have been quiet in the state for some time. In 2019, most project announcements came out of New York and California. As NWA are still in relatively early stages of development, there is no standardized method for utilities to implement such projects.
Beyond legislative and regulatory proceedings, differences in utility structure further complicate the NWA landscape. Despite a traditional disincentive for vertically integrated utilities to adopt the NWA, given that more transmission and distribution lines mean higher returns on investment, a trend toward decoupling of utilities might help remove this barrier. Several NWA projects exemplify the utility-cost savings that can result from deferring or stopping wire development projects altogether, as seen by Con Edison and GridSolar, LLC, respectively.
NWA to Bolster the Case for DER Integration
Given the absence of a standardized project development approach and the variety of technologies capable of serving NWA purposes, these projects present an opportunity for more integrated DER (IDER) where regulatory and legislative challenges can be overcome. Larger NWA aimed at deferring development of new transmission or distribution lines might be incentivized to use a variety of DER to achieve capacity and reliability targets. Con Edison, for example, employs a variety of customer-sided solutions with participation incentives to help ensure the reliability of its Brooklyn Queens Demand Management and Water Street/Plymouth Street NWA projects.
Con Edison NWA Portfolio Incentives
(Source: Con Edison)Where combinations of IDER might resemble and include microgrids or virtual power plants, NWA's defining factor is derived primarily from a given program’s purpose: to delay or replace grid structure upgrades. Inherent in NWA’s desire to defer or replace upgrades is the necessity to evaluate program success over a period of years; the primary results of an NWA project cannot be seen overnight. As several new programs in 2019 are marked cost-effective or successfully defer grid infrastructure upgrades, the use case for NWA is likely to continue building. New regulatory and legislative proceedings are expected to develop on a state-by-state basis, and utilities’ integrated resource planning efforts should bring about more NWA opportunities. Guidehouse Insights looks forward to tracking these developments up to and beyond 2028.