The Future of Electricity Resource Planning

Citations Over Time

Abstract

Electricity resource planning is the process of identifying longer-term investments to meet electricity reliability requirements and public policy goals at a reasonable cost. Resource planning processes provide a forum for regulators, electric utilities, and electricity industry stakeholders to evaluate the economic, environmental, and social benefits and costs of different investment options. By facilitating a discussion on future goals, challenges and strategies, resource planning processes often play an important role in shaping utility business decisions. Resource planning emerged more than three decades ago in an era of transition, where declining electricity demand and rising costs spurred fundamental changes in electricity industry regulation and structure. Despite significant changes in the industry, resource planning continues to play an important role in supporting investment decision making. Over the next two decades, the electricity industry will again undergo a period of transition, driven by technological change, shifting customer preferences and public policy goals. This transition will bring about a gradual paradigm shift in resource planning, requiring changes in scope, approaches and methods. Even as it changes, resource planning will continue to be a central feature of the electricity industry. Its functions — ensuring the reliability of high voltage (“bulk”) power systems, enabling oversight of regulated utilities and facilitating low-cost compliance with public policy goals — are likely to grow in importance as the electricity industry enters a new period of technological, economic and regulatory change. This report examines the future of electricity resource planning in the context of a changing electricity industry. The report examines emerging issues and evolving practices in five key areas that will shape the future of resource planning: (1) central-scale generation, (2) distributed generation, (3) demand-side resources, (4) transmission and (5) uncertainty and risk management. The analysis draws on a review of recent resource plans for 10 utilities that reflect some of the U.S. electricity industry’s extensive diversity.

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