Contrary to industry perception, growing consumer interest in distributed energy resources is not a “death spiral” for power companies, experts have found. But to get the most out of DER, the grid needs better visibility into what’s happening behind the meter.
Researchers from Oxford Economics and Siemens say, “Utilities and their customers are facing a new culture and a more nuanced relationship than the simple provider-user relationship that has prevailed since the power grid was first built over a century ago. need to adapt to the relationship,” researchers from Oxford Economics and Siemens write in a new report. .
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DERs are proliferating among households and energy “prosumers,” or organizations that consume both. and It produces energy as technological advances, growing public interest, and a series of policy shifts encourage its expansion. But by and large, large utilities resist decentralized resources.
“DER, such as rooftop solar and home battery storage, could pose a threat to traditional utility models by allowing consumers to generate their own electricity and reducing their dependence on the traditional electricity grid. is a fact,” writes the Kleinman Center for Energy Policy. “Predictions of a death spiral are that as dependence on the grid decreases, rates for customers remaining on the grid will rise, prompting those customers to also install their own DERs, and eventually It is assumed that this will lead to a vicious cycle that will lead to the collapse of electric power companies’ business models.
However, some utilities have taken a different tack and are integrating DER into their infrastructure. Both energy providers and consumers will benefit from this new arrangement, with opportunities to reduce costs, improve grid security and reliability, and innovate on green and sustainability goals.
For example, Octopus Energy, the UK’s second-largest energy supplier, launched a demand response program that delivered over 1.86 gigawatt hours of peak electricity savings, with a total cost of £7 million (CAD 12 million) to 700,000 participants. We distributed a bounty of $). TAF Research and Innovation His analyst Patrick Ronan writes about his clients:
Additionally, in Vermont, the Bring Your Own Device program reduces system-wide annual energy costs by $3 million by offering customers up to $10,500 to purchase home batteries in exchange for shared control of their devices for 10 years. I did.
In Canada, Ontario’s Electrification and Energy Transition Panel (EETP) sees potential, stating: [pdf] A recent report states that DERs can “play a critical role in decarbonization, reducing the need for large-scale new generation, distribution and transmission infrastructure as electrification accelerates.” In September 2022, a study commissioned by the state’s Independent Power System Operator showed that all additional system needs could be cost-effectively met using DER capacity between 2023 and 2032 .
However, EETP found that barriers to integrating DERs still exist in Ontario, including a lack of regulatory and system flexibility. To make the most of distributed resources, utilities need better access to data about available capacity behind the meter.
The Oxford Economics report, based on a survey of 100 electricity industry decision makers in the United States and Canada, found that utilities across the continent must contend with opaque DER data. Increasing that visibility depends on being able to build trust with customers, the researchers write.
“Most utilities surveyed understand the basics of the new energy landscape, including the total number of DERs on the grid,” they note. But finer details such as DER location, size, and activity are “difficult to track,” and a lack of clarity can make it difficult for utilities to address operational issues. there is. Utilities can gain some level of visibility by investing in technology to better track DERs.
Other barriers to behind-the-meter visibility include customers’ reluctance to share information due to privacy concerns or lack of interest or awareness. Michael McMaster, solutions architect for next-generation grid management at Siemens, said utilities need to work with customers to overcome this disconnect. A good starting point is to gather usage and preference profiles to understand when a customer is satisfied with the utility’s control of his DER and when he is not.
To close the gap between customers and utilities, “restructure the customer-utility relationship from one that is impersonal and transactional to one that is collaborative and maintains low costs while protecting the environment.” We may need to do that,” McMaster said.
This will require a “paradigm shift” in customer perception and require electric power companies to “be more than just a service.” [seen as] It’s a billing company,” he said.
“Instead, they are willing to collaborate with consumers to achieve common goals.”