IEEE Power & Energy Magazine - November/December 2017 - 84

attributes that depend on meteorological influences. Demand
(which is highly temperature-dependent) and hydro resources
(which are highly precipitation-dependent) have been a part of
electric system planning for many decades. To these, we must
now add wind and solar/photovoltaic (PV). Temperature, precipitation, wind speeds, and solar irradiation are driven by the same
fundamental meteorology and are thus codependent through
complex, nonlinear relationships taking place across wide geographical regions. Furthermore, the resource quality of hydro,
wind, and solar/PV is characterized not only by annual energy
production (AEP) but also by resource variability, volatility, and
availability; resource predictability and uncertainty; and how
well resources can match the loads they are serving, either individually or when aggregated with complementary resources.
Thus, to identify least-cost investment options, one needs to
account for tradeoffs between resource quality and transmission
distance, making it useful to assess very wide areas. Second,
wide-area planning accounts for load diversity benefits, both
diurnally (due to load-curve offset across time zones) and annually (due to capacity sharing made possible by noncoincident
peaks across planning regions).
Recognizing these issues, planners worldwide are organizing studies accordingly. Recently, the U.S. Depart ment
of Energy (DOE) has begun supporting planning studies via
their Grid Modernization Laboratory Consortium, requiring
the representation of both the Eastern Interconnection (EI)
and Western Interconnection (WI) within a single model.
In Europe, the European Network of Transmission System Operators for Electricity (ENTSO-E) conducts ten-year
network development plans to establish a long-term vision
for the entire European network. China's largest transmission and distribution company, the State Grid Corporation
of China (SGCC), has supported studies on the interconnection of five regional power grids under its administration: the northeast, north, northwest, east, and central China
power grids.
Most nations today have embraced the need for sustainable
energy infrastructure. The fact that renewable energy increasingly represents a central pillar to realize that need necessitates fundamental changes to electric system planning. Our
objective in this article is to describe and illustrate this new
planning paradigm.

Uncertainties
The nature of planning, with decisions being made in the present
to satisfy future needs, is inherently uncertain. The number of
uncertainties that significantly influence the intended planning
decision, as well as their value range, largely drives the planning process, based on scenarios constructed using the value
assigned to each uncertainty. Planners today face all the uncertainties they encountered in the past, such as demand growth,
but some have expanded ranges; there are also new ones. We
summarize the most important of these in the following.
✔ Policy: Planning is highly influenced by the potential
for changes in market design and utility models, as
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ieee power & energy magazine

well as new implementations of or changes to resource
constraints and/or carbon prices.
✔ Distributed energy resources (DERs): DER growth, including demand response, has been dramatic worldwide
(e.g., the average growth for U.S. rooftop solar has been
45% per year since 2008). Continued growth at this level
may influence requirements for transmission and transmission-connected generation.
✔ Energy storage: Future deployment levels of storage technologies will depend on the rate of decline in capital cost
and the rate of increase in the value of the services they
provide. Uncertainty regarding these rates is complicated
by the likelihood that their values at utility scale will differ from their values at the distribution level.
✔ Gas prices: The advent of shale gas availability has created large natural gas surpluses worldwide along with
an associated drop in price, making efficient combinedcycle units a technology of choice in many regions. As
natural gas demand increases, its price will surely rise;
electric infrastructure plans are influenced heavily by
the projected level and rate of that rise.
✔ Retirements: Many regions of the world depend heavily on
coal or nuclear or both. The age at which these units are
retired creates step-wise changes in new capacity needs.
✔ Technology cost: The investment costs for wind and solar/PV have significantly declined over the past ten years
as a result of heavy investment in their research and
development (R&D) and the economies resulting from
manufacturing volume. The rate of investment cost reduction-and of operating performance improvement-
for existing and new technologies is difficult to predict
but highly influential in making planning decisions.
✔ Climate change: Because decision horizons often exceed 20 years, the potential for significant variation in
meteorological influences and the related impacts on
wind, solar, and hydro resources are great.
✔ Public opinion: Strong public opposition to a technology can inflate the cost of deploying it. For example,
building transmission in many countries must account
for significant additional cost and time to engage the
public through regulatory hearings, community meetings, and mailings.
Accounting for interdependencies among these uncertainties ensures that planning scenarios have mutually consistent values. For example, scenarios showing high warming
rates should also represent reduced wintertime gas demand
and increased summertime electric demand.

Planning Processes
United States
In the United States, tariffs determine the economic criteria for planning the transmission system as well as how
transmission costs are recovered. State regulation provides
the means of revenue recovery and balances the interests of
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