For the traditionally slow moving utility sector 2014 has been a year of growing change and Engerati believes that 2015 will be even more so. Ageing and increasingly congested infrastructure, accelerating renewables development, more energy savvy consumers, the emergence of new technologies and services, and fast outdating business models are forcing the transformation. Innovation and forward thinking will be key as 2015 kicks off.
From its ongoing contact across the industry, Engerati projects some of the trends that can be expected during the coming year in the key energy market business segments.
Generation: Renewables and distributed generation
A trend of 2014 is that distributed generation is now an established part of the energy mix, especially at residential level, where it is becoming increasingly attractive to consumers, fuelled by declining solar panel and installation costs and new business models such as third-party owned systems. [Distributed Generation Most Disruptive in Europe] This is irreversibly moving the utility away from the centralised power generation model.
It is also changing the utility business model with the potentially significant loss of income in prospect and what has been argued as a cost shift to maintaining the infrastructure to non-distributed generation owners. [The utility of the not so distant future] Arizona has taken the lead with the introduction of effectively a small monthly charge towards use of the grid and more jurisdictions are likely to follow suit.
During 2015 utilities will need to engage with regulators to explore ways to support their customers to accommodate distributed generation and participate in the market, while also protecting their business. [Engerati – Residential Solar Generation and Energy Storage Market Heats Up and Plan Now For Disruption Ahead From Distributed Resources And Energy Efficiency]
Transmission: IT/OT and data
The transmission infrastructure, as the backbone of national energy systems, will continue to receive the lion’s share of the sector investments. For example, the European Union has recently announced €647 million for key infrastructure out of a total of almost €6 billion allocated to 2020. [Europe’s Supergrid Gets €734m Boost]
In addition to a focus on new technologies such as FACTS (Flexible Alternating Current Transmission Systems), a focus in 2015 will be on IT/OT integration, as fundamental for the smart grid. [IT/OT – A Marriage Of Need For Smart Grid].
During 2014 there has been a growth of big data and analytics - driven in no small measure by a growing number of sharp startups - but it is clear that many utilities are still unaware of how to extract the value from all the smart meter and smart grid data and to generate an ROI on their investment. [Going Digital to Provide More Services] This should change in 2015.
Utilities will also need to focus on the data that is provided to customers – they need to get into their customers’ homes and offices before third party competitors do.
Distribution: Microgrids and storage
Microgrids are fast developing in two areas – as an advanced technology to boost power reliability and build resiliency in the system, particularly associated with industries with critical processes and critical infrastructures such as hospitals, and for rural and off-grid electrification.
Many utilities still tend to view microgrids as a threat but there are signs that this is changing and will continue to do so. In the US New York’s Reforming the Energy Vision will be indicative in how far regulators might allow utilities to go in developing microgrids on a commercial basis. [Reforming New York's Energy Vision and Are Microgrids The Route To The Utility Of The Future?]
The formal launch during 2014 of the coming decade as the ‘Decade of Sustainable Energy for All’ will spur remote microgrid development in the year ahead. [2014 – Launch of the UN Decade of Sustainable Energy for All]
For energy storage 2015 promises to be a pivotal year with over 1GW of new projects expected to be announced and a number of them to be completed during the year. The two main drivers are the integration of renewables and the closure of ageing generation plants. [Engerati – Energy Storage Provides Value Beyond Renewables.]
Much of the focus will be on California, where the investor-owned utilities are in the midst of a mandated storage procurement, and particularly Southern California Edison which is also procuring significant additional storage resources. [SCE Leads Energy Storage With Record 261MW Purchase]
Energy use: Demand response and energy efficiency
The rollout of smart grid technologies, including smart meters and communication systems, as well as the growing demand for power (supplemented by capacity constraints) will continue to boost growth in the global smart demand response market. Innovative technological developments, for example with storage and growing numbers of electric vehicles, will also continue to open up new market opportunities for demand management. [Gridding Buildings For Storage and Demand Response Via The Cloud and Electric Vehicles.]
In 2015, it would also be in utilities’ interest, as part of their customer engagement, to focus on improving awareness of building and residential demand response and energy efficiency programmes and their benefits. Like distributed generation energy efficiency is a disruption that they will need to come to terms with.