Expanding the Possibilities: When and Where Can Grid-Enhancing Technologies, Distributed Energy Resources, and Microgrids Support the Grid of the Future? Srishti Slaria, Molly Robertson, and Karen Palmer Report 23-13 September 2023 Expanding the Possibilities: When and Where Can GETS, DERs, and Microgrids Support the Grid of the Future? A About the Authors Srishti Slaria is an economics PhD candidate at the University of Kansas and was a summer 2023 intern at Resources for the Future (RFF). Her current research seeks to explore the impacts of climate change and natural resource scarcity, and the policy implications of the findings. Within energy economics, Slaria’s research focuses on the US electricity sector. In the environmental realm, she has studied household water conservation. In the future, she is especially interested in applying behavioral theories and tools to improve consumer decision-making with regard to energy and environmental behaviors such as conservation, recycling, food waste, and transportation, both in the US and internationally. Molly Robertson is a research associate at RFF working on topics related to the electric power sector, including grid decarbonization, electrification, and electricity market design. She has also contributed to RFF’s growing work on equitable community transition and environmental justice. She holds a master’s in public policy from the University of Michigan’s Ford School. Karen Palmer is a senior fellow at RFF and an expert on the economics of environmental, climate and public utility regulation of the electric power sector. Her work seeks to improve the design of environmental and technology regulations in the sector and the development of new institutions to help guide the ongoing transition of the electricity sector. To these ends, she explores climate policy design, analyzes efficient ways to promote use of renewable and other clean sources of electricity, and investigates new market designs, new approaches to electricity pricing and regulatory reforms to pave the way for long-term decarbonization of electricity supply and electrification of the energy economy. Resources for the Future i About RFF Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy. The views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. Sharing Our Work Our work is available for sharing and adaptation under an AttributionNonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) license. You can copy and redistribute our material in any medium or format; you must give appropriate credit, provide a link to the license, and indicate if changes were made, and you may not apply additional restrictions. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. You may not use the material for commercial purposes. If you remix, transform, or build upon the material, you may not distribute the modified material. For more information, visit https://creativecommons.org/licenses/by-nc-nd/4.0/. Expanding the Possibilities: When and Where Can GETS, DERs, and Microgrids Support the Grid of the Future? ii Contents 1. Introduction 1 2. Grid Necessities 2 3. Grid-Enhancing Technologies 2 3.1. Dynamic Line Rating 2 3.2. Flexible Alternating Current Transmission System 5 3.3. Topology Optimization 7 3.4. Key Findings on GETs 10 4. Distributed Energy Resources 10 4.1. Fuel-Based Distributed Generation 11 4.2. Emissions-Free Distributed Generation 11 4.3. Battery Energy Storage 13 4.4. Demand Response and Virtual Power Plants 13 4.5. Takeaways on Distributed Energy Resources 15 5. Microgrids 5.1. Takeaways on Microgrids 16 20 6. Conclusion 20 7. References 22 Resources for the Future iii 1. Introduction Achieving the ambitious decarbonization goals established by the Biden administration, 100 percent clean electricity by 2035 and a net-zero emissions economy by 2050, requires substantially increasing the share of clean and renewable energy resources in the electricity generati