The pieces are on the table for distributed energy

A decentralized grid awaits us, but first we must put together the pieces--technological, economic, etc.--that will bring it into being.

Sometimes the ingredients for innovation are right in front of you and the only thing needed to bring it to fruition is a unifying concept. My favorite analogy for this is the iPod, which at the time of its introduction in 2001 was not revolutionary for its underlying technologies. Indeed, all of the components were readily procured. What made “a thousand songs in your pocket” a reality was instead a triumph of product design, an elegant user interface that made the pieces work together in a new way.

So it was with great expectations that I attended Greentech Media’s Grid Edge World Forum last month in San Jose. The agenda promised a look at the future of distributed energy resources and by extension the utility industry itself.

So then, how close are we to realizing the vision of a distributed grid? Are all the pieces ready to be configured into a new industry paradigm?

Clearly there is considerably more involved in re-inventing the power industry than there is in building a handheld music player. For example, the issue of standards has come up many times, often in the context of physical equipment, but while interoperability is important, we also need standards and/or best practices for DER interconnection at the distribution level, rules for DER participation in wholesale markets, and regulations governing DER ownership.

At an operational level, Peter Knazko, Segment Manager for Smart Grid & Metrology at Renesas Electronics, pointed out that utilities face a “dichotomy” of fast and slow worlds. Distribution automation is “fast” while residential meters are “slow” and the utility must reconcile these different networks to be able to apply the data streams they produce.

In addition, utilities may need to work more closely with ISOs/RTOs as more generation comes onto their distribution networks and transmission operators look for ways to balance the high-voltage system. The California ISO is probing this area with demand response programs now, but it isn’t feasible to optimize the distribution system in its entirety in real time, at least not today. AMI and smart inverters might facilitate this in the near future, but we still have yet to sync hundreds of smart inverters along a feeder and we can’t very well experiment on the live grid.

My meta-takeaway from Grid Edge, though, was that while we may not have the pieces assembled yet, we at least know what they are. Work on standards will continue. Technology costs will come down. Utilities will keep on with pilot programs. After all, they are where the rubber hits the road with this grand transition, and their very existence may depend on how they navigate it.

Jason Handley, Director of Smart Grid Technology & Operations at Duke Energy, offered one utility’s perspective, which was unequivocal when it came to DERs.

“We want to get out in front” of DERs, he said. “We don’t want to be overtaken by the reality, especially with regard to solar,” which is critical given that North Carolina is one of the top three states in terms of installed PV capacity.

Duke seeks to be seen as a partner, not simply an energy provider, and that’s important because the company also aims to remain profitable even as load growth continues to slow. Utilities need new ways of making money, and DERs offer one possible path. Duke offers both behind- and in-front-of-the-meter solutions for microgrids, for example, some of which will doubtless be used to deliver DER output to the grid.

Diversifying the utility business model is one of many pieces, both financial and physical, that will eventually be combined to create a new power industry. Let the assembly process begin.