Addressing Grid Congestion With Modeling Infrastructure

Hurricane season is one of the most challenging periods for the energy and broader business communities to navigate every year, and 2024 has been no different. Hurricane Helene alone resulted in widespread power disruption that left over 5.5 million utility customers without power in the immediate aftermath of the storm—with nearly one million still without power a week after.

The challenges posed by extreme weather are not surprising for power industry insiders. However, while hurricane season rightfully dominates headlines due to its propensity to drive widespread disruptions, it is not the only climate-driven weather pressure applied to today’s energy grid.

Image used courtesy of Pixabay

Impacts from extreme weather are being felt year-round by the energy community. For example, heat waves occur three times more frequently than in the 1960s. At the same time, drought conditions have continued to plague regions such as the Midwest, where farmers have had to rely more heavily on the grid to meet irrigation needs, ratcheting up demand.

Yet, despite the surge in demand and uncertainty posed by climate-driven risk, many energy stakeholders find it challenging to insulate their assets and “harden” themselves against disruptions. The fact that the energy industry is simultaneously trying to embrace the climate transition and meet decarbonization goals compounds this.

These factors have created an incredibly challenging landscape to navigate, and with 2025 on the horizon, now is when the energy industry must consider the processes it needs to embrace to thread this needle.

With that in mind, here are several key considerations the energy industry should remember as it steps back to assess transmission capabilities, understand pain points, and ease congestion issues.

Understanding the Transmission Congestion Landscape

Congestion presents a multi-prong problem for the energy sector. Not only does congestion lead to customer reliability issues, but strained transmission capacity can inhibit access to more cost-friendly generation sources from serving demand. Operators are forced to pay for more expensive generation options while likely seeing waning access to renewable sources, impacting decarbonization.

A warming globe impacts generation and transmission efficiency, exacerbating the overall problems. As temperatures climb, transmission and thermal generation efficiency decreases, among other impacts. These issues magnify the carbon reduction strategies and add complexity to planning for weather events.

To overcome, or at the very least mitigate these issues, stakeholders need to get a clear view of which generating assets are impacted by weather events, which in turn create transmission congestion patterns whereby electricity moves from one area on the grid to another, allowing stakeholders to understand better exactly how much congestion there is, what is contributing to bottlenecks, and ultimately what the broader market and system reliability impacts are on their infrastructure.

When businesses build accurate modeling infrastructures, they simulate market behaviors and grid physics to understand how various factors contribute to their own bespoke congestion issues. These models allow transmission systems to better plan for extreme weather and transmission congestion, leading to better usage of clean assets and reduced transmission congestion.

Identifying Optimization Opportunities

As transmission planners and system operators use these modeling tools to stress test the transmission system and generation assets with these extreme weather events to determine the best optimization avenues, all transmission and generation sources must be considered on an equal footing to test which sources allow for better grid performance and reliability.

At the same time, this assessment also needs to consider the potential use of grid-enhancing technologies—such as topology optimization and dynamic line ratings—to boost the flexibility and efficiency of the grid and lay the groundwork for variable renewable energy.

Assess Forecasting Capabilities

Stakeholders’ ability to forecast properly is equally important as having a firm grasp on the here and now of their energy congestion landscape and avoiding potential operational and financial risks. As part of their congestion assessments, stakeholders should be mindful of analyzing how the congestion along specific transmission paths impacts basis risk—the difference in price between the generation node and market hub. Assessments should also consider curtailment risks relating to renewables, which are often the most impacted during congestion and can have significant consequences on an organization’s ability to hit its energy transition targets. This is all tied directly to how the stakeholders can better insulate themselves from the financial fallout from congestion. For example, having a better sense of congestion risks allows financial stakeholders to take more appropriate hedging steps, such as purchasing financial instruments like financial transmission rights and congestion revenue rights. More broadly speaking, giving grid participants a clearer sense of congestion can help mitigate sudden spikes in pricing and limit market fluctuation so costs stay more stable.

Moving Forward

The devastating 2024 hurricane season should be a learning opportunity for energy stakeholders, not just ahead of the next hurricane season. Still, it needs to inform the space about the perils of extreme weather throughout the year. Energy players can learn these lessons and lean into the modeling tools and modernization opportunities that will help their stakeholders better meet their energy needs and hit decarbonization targets cost-effectively.