Utilities are changing in ways that we could not have predicted just a few years ago. Much of the changes are due to distributed energy resources (DERs), which combine several energy sources, such as solar, wind, and thermal, to deliver electricity to consumers. The advent of DERs has led to the emergence of new constructs—such as microgrids and retailers that can sell alternative energy—that have the potential to threaten traditional utilities.
It’s important for those working in the power and energy industries to better understand what’s changing. In an IEEE edX course I teach, Distributed Energy: Smart Grid Resources for the Future, I cover the changes, including new ways to generate, store, and sell energy. Registration is open. Those who enroll might be eligible to earn continuing-education units and professional development hours.
WHAT’S WRONG WITH THE GRID?
“Business as usual” worked well for the utility industry for a long time because it didn’t have the need to compete. But now, for the first time, the customer has incentive to switch to other another energy provider, especially as prices continue to fall.
Despite the smart grid having come a long way in terms of being efficient, reliable, and resilient against outages, it is designed only for a one-way power flow. DERs, on the other hand, can send unused energy back to the utility. The next step could be for consumers to deliver power to other consumers, such as neighbors who are without power or those who want to combine resources.
Moreover, customers can install DERs in their homes to reduce their dependence on utility companies. That might include installing solar panels on a residential rooftop, as well as backup resources such as diesel generators in case of power outages.
As a result, utilities need to make dramatic maneuvers, including adopting DERs into the grid as well as considering new business models and products. That might include solar installation services and providing backup generators. Utilities also might want to consider aggregating their energy resources and offering any extra they might have at reduced prices.
IEEE Senior Member Mani Vadari is founder and president of Modern Grid Solutions of Sammamish, Wash., a company that provides consulting and training services to utilities and smart-grid companies worldwide. He is also the director of sector services for the Smart Cities Council, which is responsible for producing the Smart Cities Readiness Guide workshops as well as assessments for how municipalities can become smarter. Vadari’s book, Electric System Operations: Evolving to the Modern Grid, is available online.