However, distributed energy resources (DER) installation and usage is not without its challenges and difficulties. It is known, for instance, that the cost of implementing certain DER technologies can still be high, even though they may be a more economically viable option in the long run.
George Simons, Director of Software and Services of Itron, addresses the opportunities and challenges of DER integration for the utility industry. “There’s really three real-world problems for utilities with DERs, and the first really has to do with loss of revenue. So every [private] PV system is a loss of electricity sales to utilities.”
Simons adds that the installation of PV systems is rapidly gaining worldwide momentum, which means that more and more customers may become less dependant on the electricity grid and therefore defect from utility companies. “It’s a loss of revenue, potentially, when you begin to add in storage in combination with PV. As the cost of PV and storage decreases, ultimately utilities have to be concerned, are people going to leave the utility?”
Net load shape and utility consumer behaviour
The second problem identified with DER integration, according to Simons, has to do with a change in the net load shape as PV systems gain adherence.
“Historically, homes have seen an increase in demand in the morning, followed by a lower demand in the afternoon and then an increased demand in the evening. When you get photovoltaics that are being installed at home, all of a sudden you get a PV profile midday, when demand is low, and potentially it can cause what is known as reverse power flow. Those cause problems to utilities in that these are net flows that impact how they operate the grid and also what they have to do for infrastructure costs.”
Finally, consumer behaviour is also an issue that can potentially be faced by utilities when dealing with DER integration. “Not all customers behave the same way. Some charge vehicles at different times, so they’re seeing a variety of these different types of net loads. So that causes an uncertainty problem for the utilities,” says Simons.
Long-term benefits of DERs
However, when overcoming these problems, Simons argues that DER integration is economically viable, in addition to its sustainability advantage. “When you start to think about the idea that PV and storage can end up with revenue loss, utilities can actually do some jiu-jitsu and turn that around. Now all of a sudden they can provide ways for customers to charge their cars in certain locations and give them better economies,” he says.
“Bottom line is, utilities spend billions of dollars every year on distribution upgrades, and through distributed intelligence we’re able to not only defer that but in some cases actually eliminate those costs. It’s a huge opening.”
DER implementation offers the potential of shifting energy consumption patterns, particularly from a customer point of view. By adopting a long-term view and taking a stance to implement innovations that can work for the communal good, utilities may have the opportunity to invest in technologies that will be economically and environmentally viable in the long run.
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