With distributed energy resources (DER) set to double by 2023, U.S. utilities must understand that it will be their command of data, not the size of their power stations, that will determine their capacity to keep the lights on, reports Greentech Media.
“As of 2017, five classes of behind-the-meter DERs—distributed solar, small-scale CHP [combined heat and power], residential smart thermostats, electric vehicles, and energy storage—contributed 46.4 gigawatts of impact on the U.S. summer peak,” said Ben Kellison, grid edge director at GTM Research.
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While “that’s not a huge number, compared to the 769-gigawatt summer peak load reached by the U.S. as a whole in 2016,” Greentech Media notes, “it’s still a valuable source of flexibility, if it can be utilized.”
And American utilities are warming to the possibilities, feeling less “threatened by the growth of DERs” than in the past, with only 3% of utility executives recently surveyed by GTM viewing DERS “purely as a threat, while 44% labeled them an opportunity.” (“To be fair,” adds GTM, “55% of respondents chose ‘both a threat and an opportunity’ as their answer.”)
Alert to the possibilities, “more than 100 U.S. utilities have set up at least a ‘basic DER marketplace,’” Kellison explained, via online portals that enable customers to purchase energy-efficient services and appliances and to tap into rebates and third-party offers. Those marketplaces are now available to “more than 60 million customers, or about 40% of the country,” he added.
But there are challenges ahead.
A fundamental realization for the utilities will be that “these are not all resources that can be dispatched in a moment’s notice,” Kellison cautioned. The generally off-peak pattern of solar will need to be anticipated, for example, along with the reality that “small-scale CHP systems, defined as less than 50 kilowatts of generation capacity, will run according to the needs of their owners, not necessarily those of the utility.”
The biggest shift that the acceleration of DERs will demand of utilities, however, is a rethink of investment in grid infrastructure. Still pumping significant funds into traditional structures like station equipment and power lines, utilities need to understand—and quickly—that keeping the lights on will increasingly be a matter of assembling and integrating ever-expanding pools of data, as more and more customers invest in DERs.
And as utilities encounter “a lot more data than we are used to,” he added, “we’re going to need new platforms, such as distributed energy resource management systems, which can integrate data from multiple systems and sources and convert it into actionable intelligence for utilities.”
An example of such intelligence, writes GTM, are “non-wires alternatives, or NWAs—a term coined by New York state to describe projects that allow utilities to earn some form of return on investing in DERs, many of them behind the meter, in lieu of infrastructure upgrades.”
As of the last three months of 2017, “19 states had some form of NWA-type policy either in planning mode or in some stage of completion, accounting for more than 1.7 gigawatts spread across 141 projects.”
With much work to be done to accommodate the predicted “explosion” in DERs, GTM Research has developed a “DER life cycle process” designed to guide utilities through the intricacies of shifting “their legacy customer, analytics, operational, and asset management software systems into those centred on DER integration,” Greentech Media notes. Kellison predicted that, with DERs, “customer systems have to feed into planning. Planning systems have to feed into operations. And operations eventually has to feed into [operations and maintenance], which largely involves utilities doing maintenance on their own equipment, but may in the future involve them working more directly with customers.”
Facilitating such communication between utility and customer will be the presence of more and more “grid-responsive” homes, equipped with smart thermostats and connected water heaters and lighting. Greentech Media explains that “such connected home technologies have two-way communication capabilities that enable them to collect data on electricity consumption and be more integrated with grid operations—differentiating them from energy-efficiency upgrades and one-way demand response controls that offer limited visibility and control capabilities.”
