An integrated plan for a coordinated deployment.

We are struggling to update and grow the end-to-end electrical grid at a pace that matches the needs of energy consumers. The challenge of confidently and timely serving power to strategic customers like data centers and manufacturing is broadly acknowledged. (E.g., IEA global analysis; Goldman Sachs data center analysis; Grid Strategies strategic industry demand growth). We are not yet integrating at scale the available hardware and software technologies that can modernize planning and operations by unlocking visualization and coordination capabilities. (E.g., Latitude Media article on DOE grid Liftoff report; Deloitte Research Center article). And customers are not being sufficiently engaged to help deliver the affordable, reliable, and resilient modern grid they want; instead, they are treated as system-takers with incremental value to contribute. (E.g., Power article on VPPs; ICF post on customer engagement).

How might we more effectively build the grid that customers need? A shared strategic plan feels intuitively right and worth exploring. When systems experience significant stressors that require new ways of working, a strategic plan places stakeholders on a shared path and provides a common language for efficient communication and tough decision-making.

But who makes the plan and administers it? Neither question has a single acceptable answer as long as the system has the value reduced to writing, coordinates consistently with it, and stakeholders periodically evaluate progress and adjust as needed. The key here is to start, which requires a team bold enough to build a good draft plan and to seek input from the system to generate momentum.

How might we build that good draft plan? We could take a fully bottom-up approach through which local needs take the lead. Local decisions would set the constraints against which the rest of the system is defined, in as much as the distant needs of the system can somehow be tied back clearly to benefits in the local system. Alternatively, we could start from the top layers of a national grid and allocate roles, assets, and costs throughout the system. This national grid approach would take on the cultural and political nuances of U.S. society. Or we might rely on the regional-middle to manage compromise at the local level and negotiate benefits between regions. This approach has had successes but has not met the pace of change and arguably leaves local and national value on the table.

Which of these approaches works best? The answer will almost certainly depend on how we frame our objective, so let's debate that first.

What are the key characteristics of the grid we want to build? I posit that it is a grid capable of providing power at the rate and in the places needed to timely fuel electrically powered customer tools. There is likely a finger on the scale to prioritize power for industries with critical security, prosperity, and health roles and another finger on the scale to protect fairness in access and affordability to the rest of the grid customers. The public good principles of access and affordability mean that we will fall short of our goal if critical industries meet their own needs by off-gridding. The principles also mean that we are resource constrained and need to be savvy with our budgets, spending efficiently, recruiting new sources of capital, and investing in insight producing tools to inform decisions about the value and prioritization of spend.

In sum, we need a grid system that is (a) driven by information, (b) capable of providing timely power, (c) focused on enabling customer tools, (d) prioritizing critical industries to keep them on-grid, (e) but not by reducing access and affordability for all grid customers.

Let's revisit the three planning approaches with this framing in mind. A fully bottom-up plan risks redundancy, and lost opportunities for economies of scale and meeting resource adequacy, reliability, and resilience through generation and geographic diversity. A fully top-down approach risks local and cultural resistance, frequent stops and starts with political change, and drag-out arguments about how to fund the plan. The approach is also likely cost inefficient due to uncertainty, efforts to undo what was done before, and eventual lack of timely progress (as experts have told me, the most expensive grid project is the one full of litigation, uncertainty, and delay). A middle-mediated approach solves and suffers a bit of each the bottom-up and the top-down approaches. However, it faces challenges common to three-sided negotiations in that the entity in the middle becomes a bottleneck and arbiter of action. Pace is often slower than desired, and the system takes on "wait and complain" behaviors because it does not feel empowered to influence or act.

Is there another planning approach that might improve upon the challenges of these three? Perhaps a hybrid of the bottom-up and top-down approaches that minimizes bottlenecks and feelings of intermediation?

Let's consider a top-down, bottom-up-informed plan, which (a) provides a view of the benefits and needs that can be solved in each area of an idealized (but pragmatically optimized) grid and (b) allows regional and local actors to collaborate and tailor the precise methods of achieving the identified needs based on the minimum expected benefits. There is a lot to unpack in that one sentence, so let's consider the component parts:

• A plan that is top-down and informed by bottom-up data and objectives allows for informed planning with a consistent strategic and portfolio-based lens. It creates the opportunity to inspire buy-in to the overall plan by system stakeholders through input, collaboration, and relevance.

  
  

• A shared, end-to-end view of the benefits and needs to be resolved in each area of the grid enables system stakeholders to appreciate the contributions and value created by others in the system, how the parts come together, and why it is essential for all participants to contribute and not rely on the commons to provide.

  
  

• An idealized but pragmatically optimized plan requires us to have the ambition to build the smartest grid we can. A grid that is responsive to modern needs and tools but committed to making efficient use of valuable existing assets, delivering power at the right time and place, and avoiding perfection as the enemy of good action.

  
  

• A strong plan realizes that while effective system strategy is organized at the top, it is implemented most effectively through delegation. Local decision-makers will be responsible for defining how to solve the needs in their footprints and trusted to negotiate, with mediation, the puts and takes of their regions. A clear, shared plan should create incentives for collaboration between system stakeholders with the idea that better solutions come from collaboration, as will commitment to implementation.

  
  

• Finally, the plan should set minimum expected benefits in each region but allow for and reward solutions that exceed expectations.

To create a top-down, bottom-up-informed plan we should first challenge ourselves to build an idealized model of a future-ready grid system. An idealized model brings ambition and requires us to envision the system we would build if we could build it from scratch. Such a model is not the end goal but a critical step to breaking out of status quo behaviors. We would be remiss if we did not leverage a century of hard-earned operational lessons, technologies that provide better visibility and control, and new generation and storage assets, let alone respond to the challenges of a digitally powered society experiencing the financial and safety risks of a changing climate.

A future-ready system view requires us to plan several investment cycles out and create a "north-star" vision. Having a north-star allows for multiple iterations of coordinated activity and builds in opportunities to assess progress and confirm or revise the direction of travel. It creates transparency and participation, which helps inspire confidence and the commitment needed for real change. It signals that the system is growing and builds a flywheel of certainty that surfaces capital. A plan, even when iterated upon, provides the signposts needed to arrive at the grid we want, not just the grid we built ad hoc.

Tactically, a future-ready view should include projections of efficient, flexible, growing load centers and diversified portfolios of future cost adjusted energy generation resources, including cost of emission mitigation technologies where appropriate. Let's dig in deeper on a few points:

• When projecting future demand, we should expect customers to participate in making the future grid affordable and reliable by contributing flexibility and architecting in efficiency where possible. Flexible and efficient solutions should not come from energy management alone, but also through improvements to underlying business processes and tools that require energy as an input.

• When planning for generation resources we should evaluate their contributions as a sum of portfolio parts. Asset costs are not consistently proportionate to system value. An asset may have more value than another because of its ability to perform multiple jobs or its strategic ability to fill a unique need in the system. The portfolio should consider both local and national needs for energy abundance and security through diversity of asset type and location, while still permitting room for local policy prioritizations within overall system guardrails.

  
  

• A future-ready plan will not exclude a technology because it is not yet deployed at scale or cost competitive. Instead, if a technology has a reasonably foreseeable path to technical and economic viability, it should be considered within the plan for the value it can deliver to the system. Taking this proactive view of the system can help set viability targets and develop the system buy-in that is so critical to the success of new technologies. Targets can also be tracked for success or good faith reconsideration if the technology does not eventually prove viable.

  
  

• Finally, as this is an idealized plan, emission mitigation technologies should be included, whether to offset the carbon-equivalent budget impact of newly built or retained emitting technologies or to deploy technologies that can reduce our carbon-debt for future generations.

Once we have an idealized model, how do we make it practicable? A north-star is immensely valuable, but action comes from translating it into component steps.

Step two is to run numerous simulations from the model baseline to iterate compromise outcomes that illustrate different transition paths from today's grid. Within the myriad transition paths, patterns are likely to emerge and may be considered "no regret" or foundational investments. Running through potential future outcomes to identify patterns builds a resilient plan, drives important conversations about stakeholder priorities, and increases confidence and certainty in the ability to meet the end goal of a modern grid.

Optimization criteria that inform the simulations could include variables such as:

• The timeframe in which currently unavailable power must be delivered for critical customer needs.

  
  

• Risks to load centers, generation sources, or grid assets due to shifting land availability, permitting limitations, and community support.

  
  

• Ultimate technological viability, cost, and benefits of newer technologies with which the system is less familiar and earlier on the learning curve.

  
  

• Affordability of investments across time and space in light of available capital sources, including customers, government held tax funds, private, philanthropic, and market.

  
  

• The magnitude of economic growth enjoyed by strategic industries that were prioritized during early grid modernization and the potential for some of that value creation to be reinvested into further modernization of the grid, whether through contractual mechanisms or a share of tax reinvestment.

Optimization-driven scenario planning could be operationalized through a shared model within a collaboration platform that system stakeholders access and contribute to. This model would have a sufficient (but not excessive) level of granularity to permit informed and transparent decisions. AI and computational advances will support the analysis.

At this point, we will have an ambitious but practicable plan with a known range of paths that still get us to our end objective of a modernized grid. This should drive excitement and confidence and make the challenge of transformation seem more like a multi-step set of incremental changes that the system can advance through distributed actions.

So now we move onto the third step. We expose the plan and its permissible range of compromises through the utility to the commercial market. This preserves the benefits of the utility as a channel (or platform) for customer service and scale efficiency but invites competitive and innovative thinking to reinforce high ambition and allow a broad range of technologies and process improvements to be applied to meet system needs. We can also expose the plan to capital markets and regulators to demonstrate paths to success, enabling more efficient capital allocation and well-tailored regulatory tactics and incentives that reinforce the routes to modernization.

In sum, an effective plan will put our hands and heads to action toward a shared vision. It can uncork the bottlenecks and allow confident advances against the plan through loose coordination. A plan will make us more efficient in our use of capital and potentially unlock additional sources by increasing certainty and exposing the value of the investment. A good plan can provide clarity and opportunity to improve processes surrounding interconnection, paying, and permitting.

A plan is not a panacea for everything, but it improves the likelihood of achieving big goals. We will not achieve the precise plan (nor is that the goal), but at a minimum we will open a productive conversation of how we all need to pitch in to solve our shared portfolio of needs in an interconnected system. It will require us to pencil out how to meet those needs in a coordinated, efficient, and more cost-effective manner. This may be what we need to get close enough to "perfection" to be good enough.

Alexina Jackson, managing member of Seven Green Strategy