Reliable operation of electric power systems requires the real-time matching of instantaneous electricity generation and demand. Achieving a continuous match between supply and demand requires utilities, grid operators, and other stakeholders to use a variety of sophisticated software operating across a wide range of timescales. Existing grid software was designed for a power grid centered on conventional generation and transmission technologies. Recent years have seen major developments in new types of resources including distributed energy resources (DER), intermittent resources (wind and solar), and storage. Such emerging technologies have unique characteristics distinct from conventional resources. Emerging technologies face a prohibitive barrier within large-scale grid operations as the existing software support systems do not acknowledge these unique characteristics with the same level of accuracy and efficiency with which they capture conventional resources. As a consequence, this existing software paradigm does not allow for these assets to be used to their full potential. Furthermore, the ever-increasing emphasis on grid resilience demands innovative management of a more diverse resource portfolio, which existing grid software is not equipped to handle without overly simplifying assumptions. Simply put, in order to improve grid resiliency, the power industry must significantly advance grid software. Innovation is needed regarding the underlying simulation, optimization, and control methods in order to enable increased grid flexibility, reliability, and resilience while also substantially reducing the costs of integrating emerging technologies and resources into the electric power system.
To this end, ARPA-E has set a goal: new modern and innovative grid software to achieve a modern grid. ARPA-E is targeting key areas for innovation in grid software including, but not limited to, optimal utilization of conventional and emerging grid technologies, management of dynamic operations of the grid (including extreme event response), and management of millions of emerging distributed energy resources.
This broader effort begins with the launch of the Grid Optimization (GO) Competition. If successful, the GO Competition will accelerate the development of transformational and disruptive methods for solving problems related to the electric power grid and to provide a transparent, fair, and comprehensive evaluation of new solution methods. The GO Competition is aimed at overhauling and modernizing grid software and will be structured as multiple challenges, the first of which is expected to begin in the fall of 2018.
The GO Competition will incentivize entrepreneurial efforts that align with ARPA-E’s mission to innovate in grid software. The algorithms and software solutions submitted to the GO Competition will supplement ARPA-E efforts to break down barriers to empower widespread, fast adoption of emerging grid technologies with the goal of saving billions of dollars in an energy sector with revenues reaching close to $400B per year.
 Energy Information Administration, “Revenue from Sales of Electricity to Ultimate Customers,” https://www.eia.gov/electricity/annual/html/epa_02_03.html