While the influx of distributed energy resources are pushing grids to their edge, the right tools can make all the difference. 

 

Today, distributed energy resources (DERs) are pushing utilities to the edge of the grid- literally. That was top of mind at last week’s Grid Edge World Forum in San Jose, an event that nearly doubled in attendance numbers from last year. Such a surge in attendance proves that DERs are causing a fundamental shift within the utility industry that cannot be ignored.

“The entire electric system architecture is changing and we are redefining the future,” said Grid Edge Director, Steve Propper, on the opening day. While the grid edge provides new opportunities for utilities to create a more sustainable grid, a fundamental change in their business models will be required. Utilities are starting to agree-  a recent Utility Dive survey found that 60% of utility professionals agreed that “their utilities should partner with third party vendors to deploy distributed energy resources.” In addition, “nearly the same amount (59%) said they thought their utility should own and operate distributed energy resources, rate-basing their investments in the technologies.”

Investments in distributed energy resources have grown as well- rising from $483 million in the first half of 2015 to $577 million in the first half of 2016. As these new technologies begin to generate electrons for the grid, it will be incredibly important to manage these investments with diligence.

The transition to a grid powered by distributed resources, however, “starts with maintaining the safety and reliability of the system,”for companies such as Duke Energy. Vice President of Grid Solutions, Lee Mazzocchi, noted at the event that, “We have to make sure we have the right standards in place. We have to invest in the right infrastructure for the technical integration of DERs.” For any grid with a high penetration of distributed energy, an important component of that investment will not just be in “hardware,” which includes large infrastructure projects like transmission, substations. and new clean power plants. New investments also need to include IT systems that will help run, model and plan the electricity grid.

Despite the benefits of DERs, their increased penetration is coupled with some risks related to reliability. Unlike other types of public utilities, where mistakes might mean a spotty internet connection or a dropped cellphone call, the electricity system cannot tolerate unreliability. Electricity blackouts can be life threatening and cause severe economic damage. Improved models and better planning tools can help serve the important task of identifying and planning which technologies are the best to integrate, in addition to monitoring and operating the 21st-century grid. Information technology and improved modeling provides pipeline visibility, greater insights into inter-dependencies, support for strategic policy and target settings. All are important aspects of building a reliable grid based on distributed generation technology.

However, the challenges with distributed resources, such as balancing intermittency and new generation profiles, are not limited to engineers. With new types of investments comes new financial management challenges. As distributed energy assets begin to grow, the complexity of managing this diverse group of assets can also become more complicated. Financial management solutions help streamline this process, as careful management of the investment lifecycle of assets helps increase productivity and capacity as complexity increases. Systems and tools that have data, documents, models and workflow all in one system will be increasingly valuable to any asset manager balancing a more complex and diverse portfolio of clean resources.

Overall, the benefits of distributed energy resources are becoming increasingly important on the path to a clean energy future. With their increased penetration comes increased energy security, valuable economic growth and substantial environmental benefits. Their success, however, will depend largely in finding the right methods and solutions to effectively integrate them into the grid.