Illinois is the Grid Modernization Market to Watch: Report

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Illinois is emerging as the best kept secret in grid modernization, taking big strides that go unnoticed in the shadow of high visibility coastal states that are pushing for flashier industry reforms.

That’s the word from a new report, “Generation to Generation: An Energy Evolution,” by management consulting firm ScottMadden.

The report finds that Illinois has “quietly solidified its position as a market to watch” while “New York and California are often identified as leading the charge on innovative energy policy.”

Editor’s Note: The innovation underway in Illinois caught our attention too. So Microgrid Knowledge selected Chicago as the site of Microgrid 2018, May 7-9.

The penetration of distributed energy resources (DERs) remains relatively small in the Midwestern state. But the report authors expect it to grow as a result of two significant pieces of legislation:

  • The Energy Infrastructure Modernization Act of 2011 established performance-based rates for the state’s two investor-owned utilities, Commonwealth Edison and Ameren. The legislation also authorized the utilities to invest in significant grid upgrades.
  • More recently, the Future Jobs Act of 2016 created a pathway for setting a value for distributed energy. The legislation also takes steps to expand renewables and energy efficiency.

Of note, Illinois utilities are investing $3.2 billion in grid modernization improvements, including installation of smart meters, says the report. The state also has set demand reduction targets of 17 percent by 2025 and 21.5 percent by 2030 for ComEd, which serves 74 percent of the market. Ameren, which serves 24 percent of the state, is charged with reducing demand 13 percent by 2025 and 16 percent by 2030.

In addition, the state is allocating $140 million/year for the Illinois Power Agency to purchase renewable energy credits, a move expected to boost development of green energy. The state renewable portfolio standard now includes carve outs for both utility scale and distributed solar.

“Illinois has laid an excellent foundation that positions it well for increasing penetrations of DERS and renewables,” says the report. “When DERs arrive at scale, the state will be ready.”

Indeed, the state already has a leading-edge microgrid, which Ameren began operating earlier this year. The demonstration project features a cybersecure microgrid that also is one of the few in the world that operates at utility-scale voltages and can seamlessly transition from grid-connected to island mode.

In addition, ComEd has a microgrid cluster on the drawing board, the interconnection of two microgrids that would work together to create a whole greater than the sum of its parts. Known as the Bronzeville microgrid, the project would connect with an operating microgrid at the Illinois Institute of Technology.

With the help of a federal grant, ComEd has developed a master microgrid controller, designed to manage multiple microgrids. Some expect such activity – the management of microgrid clusters – to offer future business opportunities for utilities.

“Illinois is leading with the degree of transformative change taking place with the physical assets being installed across the utility systems and the variety of options and efficiencies being made available to the retail market,” says the report.

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That’s not to say grid modernization will be smooth sailing in Illinois. The report notes that grid operators PJM and MISO must resolve how DERs will participate in wholesale markets. In addition, the state must find a path to resolve the competing requirements of maintaining viable utilities that ensure electric reliability, while making room for third parties to install distributed energy and drive down consumer costs.

Registration is now open for Microgrid 2018, hosted by Microgrid Knowledge, May 7-9 in Chicago. Our last conference sold out. Register today!

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About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.