Earlier this month, Washington, D.C.-based Pepco turned the most recent United States utility to hunt out non-wires alternate options (NWAs) to handle an upcoming constraint on its community.

In early August, the Exelon subsidiary known as on distributed power builders and different stakeholders to suggest alternate options to putting in a fifth transformer at one in all its substations. The present transformers are forecasted to exceed their agency capability by 2026.

Will any of the proposals slated to be submitted to Pepco early subsequent yr succeed?

Solely time will inform, however a brand new Wooden Mackenzie analysis report finds that on common, NWA alternatives proposed in the USA transfer ahead solely 40 p.c of the time.

That’s as a result of NWA proposals are nonetheless usually deemed both costlier or much less dependable than the standard reinforcement choice.

Most recognized NWA alternatives are usually not carried out

Wooden Mackenzie defines NWAs as tasks wherein utilities use distributed power sources (DERs) and different applied sciences to strengthen the grid, as an alternative of counting on typical transmission and distribution property.

Rules in some states encourage utilities to establish NWA alternatives each time attainable, however the resolution on whether or not to pursue them is left to utilities’ cost-benefit analyses.

The pipeline of recent NWA alternatives — these looming grid upgrades that might probably be met by means of DERs, in response to the evaluation of the utilities which have recognized them — is rising within the U.S. In response to WoodMac information, NWA tasks comprising a complete of roughly 850 megawatts of energy capability within the have been recognized or carried out throughout the nation. 

Nevertheless, these developments have remained too slow-paced and rare to raise NWAs to the extent of a major enterprise alternative for DER suppliers.

Most of those tasks are in states the place regulators mandate that utilities establish new NWA alternatives as a part of their grid planning processes, similar to New York and California. Certainly, these two states host 72 p.c of the 321 tasks included in Wooden Mackenzie’s U.S. NWA database.

On the similar time, as regulators push extra utilities to report on a wider set of potential NWA tasks, the proportion of NWA alternatives being carried out in comparison with the overall recognized within the database is shrinking. That is as a result of an rising variety of recognized tasks have little to no hope of shifting on to the solicitation stage.

This case has created a double-edged sword for the sector. On one hand, broad disclosure of NWA alternatives offers helpful info for third events, similar to DER suppliers and utilities and regulators in different states.

Alternatively, this broad disclosure dilutes the share of NWA tasks progressing towards implementation. This case dangers reducing curiosity in NWAs from the identical third events, as tasks solely transfer ahead in 40 p.c of instances.

Value and reliability considerations are the primary elements that lead to tasks not being pursued.

Each NWA mission is exclusive and presents its personal particular challenges. The power of relationships between DER suppliers and utilities is a significant factor in figuring out whether or not NWA tasks transfer ahead, as are siting and allowing points. All of this complicates counting on DERs for grid upgrades, even for these utilities which have overtly dedicated to pursuing NWAs.

Battery storage emerges as most popular NWA useful resource

Declining DER prices and the event of recent worth streams for DERs by way of market design reform might be key enablers of larger penetration of NWAs on the U.S. grid over the approaching years.  

For instance, Wooden Mackenzie expects the implementation of FERC Order 841 to extend the feasibility of NWAs that use battery storage options.

The power to value-stack by collaborating in wholesale markets will possible allow DERs suppliers to supply utilities a extra engaging answer for his or her NWA tasks.

Wooden Mackenzie’s latest report finds that of these NWAs that do transfer ahead, front-of-the-meter battery storage is the expertise of alternative.

Due to its larger cost-competitiveness in comparison with different sources, battery storage accounts for almost all of NWA mission capability at the moment below implementation within the U.S., and Wooden Mackenzie expects FERC Order 841 will strengthen this development going ahead.


Francesco Menonna is a grid edge analyst at Wooden Mackenzie and writer of the latest report U.S. Non-Wires Alternate options H1 2020: Battery Storage Seizes High Spot as Utilities’ Most popular Non-Wires Useful resource.

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