Energy resilience, flexibility highlight utility industry event
This article is adapted from GreenBiz's newsletter Energy Weekly, running Thursdays. Subscribe here.
This week, the country’s foremost utility geeks descended on San Antonio to let their inner wonks run wild.
The conference, DistribuTech International, featured the nation’s largest utilities mingling with service providers demonstrating their latest technologies and offerings on impressively large screens and surprisingly intricate displays.
The themes of this year’s conference across the floor: resilience; flexibility; and distributed energy resources (DERs).
While most conversations are deep in the utility use cases, the challenges and opportunities discussed are just the other side of the energy transition coin. I asked some leading experts and service providers what they thought the most exciting trend — or technology — is in the energy transition.
Distributed energy resources and microgrids
DERs such as rooftop solar, electric vehicle (EV) charging stations and energy storage are here, and utilities have opportunities to evolve to include them in their business model. This is a change in tone: Utilities historically resisted, fearing it would lead to grid defection and threaten their legacy services.
Over the last two years, however, a growing number of utilities have begun working with customers to integrate DERs into the grid (a process known as grid integration) to become a new revenue stream for both parties.
For the end user, that means cleaner, more reliable energy that also could save money.
"I’m happy that utilities are fully engaged now in distributed energy generation and microgrids," said Clark Wiedetz, director of microgrid and renewable integration at Siemens. "That will help the end-use client, namely commercial and industrials, because they’re looking for saving money by having their own generation."
The growth of grid integration could pave the way for more companies to embrace microgrids (assuming utilities streamline the process to interconnect them with the grid) and provide utilities more resources in the case of an outage or a natural disaster, such as wildfires, hurricanes or floods.
According to Wiedetz, the biggest barrier to more microgrids and DERs is policy.
"Technically, the solution has been out there for quite a while. The technology is there," he said. "So now the flip is, do we have the legislation to make this happen and do we have the financing? Once those two start to get streamlined, you’ll see more expansion."
Flexibility is essential for utilities to retire dirty energy plants while providing reliable and affordable energy.
"The next big trend is going to be the ability to provide flexibility at scale across a wide value stream," Vera Silva, chief technology officer at GE Grid Solutions, told me.
Simply put, grid flexibility is the ability to shift energy demand to match renewable generation using software (including demand-response technologies) and hardware (including energy storage to save energy for when customers need it).
Both require a level of customer participation — especially to keep energy prices low while utilities strive to meet their clean goals.
"The customer-centric grid is going to be the key enabler to achieving some of these aggressive renewable portfolio standards that require more customer distributed energy resources," Brad Williams, vice president of industry strategy at Oracle, told me. "To do that safely, utilities need to engage those customers to be participants of the grid operations."
On the hardware side, energy storage is deployment is also key.
"It’s not a brand new innovation, but pricing is getting to the point that energy storage is more interesting in more applications," said Jason Abiecunas, associate vice president and client account executive of distributed energy at Black & Veatch. "We’re at a point where more widescale deployment at commercial installations to support resilience plus sustainability is going to start to pencil out and check those boxes of sustainability goals."
New business models
With every consumer becoming a producer (referred to as "prosumers"), off-takers have a lot of decisions to make about a quickly changing field with a lot of moving parts.
As a result, service providers — such as Siemens, ABB, Engie and Schneider Electric — are building a business in designing comprehensive energy strategies for companies, campuses and municipalities. As Don Wingate, vice president of sales at Schneider Electric, put it, "Who do you know that tried something new and got it right the first time?"
In addition to consulting services, these giant companies are developing business models that sidestep initial capital outlay that may scare off some commercial and industrial customers. Schneider Electric, for example, offers "energy as a service," where it builds, maintains and owns a microgrid at a client’s facility and sells the energy to that client.
"Microgrids are very complicated sometimes; how do you take the mystery out of it? How do you make the right choice?" Wingate said. "Being able to go to a customer and say, ‘You don’t have to have a capital expenditure, you can get a defined solution, an outcome,’ is exciting to the industry."
Automation and optimization
Here’s the thing about energy customers: We're lazy, and it’s hard to get us to do anything.
That’s why so many vendors are working to crack the code to automate processes to help DERs work together and provide better grid flexibility. These usually involve a combination of using internet of things technology to connect to devices, artificial intelligence to make sense of the signals from the devices and deep learning so the automation learns from the data it receives. To name a few developments at the conference:
GE Grid Solutions launched its Digital Energy Innovation lab
AutoGrid and Schneider Electric announced a partnership surrounding management software that incorporates behind-the-meter DER optimization and automation
OSIsoft announced a partnership with DERNetSoft related to its AI-based tool for data visualization and optimization to make an energy marketplace
ABB is boosting automated services through its "Grid Edge Solutions" services
"Automation for solutions is really being able to do control and energy management, especially when we’re looking at multiple components," explained Maxine Ghavi, head of grid edge solutions business at ABB. "We have solar, we have storage, we have EV chargers and you want to manage all of that — plus the existing assets that are on-site for C&I customers."
The idea is your devices and assets can communicate — and balance — the other demands on the grid. So basically, your operations can be a team player with the rest of the grid. This will become increasingly important as demands for electricity grows, driven by the electrification of heating, the electrification of transportation, edge computing and indoor agriculture.
The value of resilience
Underlying each trend is the urgency to increase energy resilience as natural disasters — and corresponding grid outages — increase.
Many technologies are cost-competitive with conventional options only when factoring the value of keeping the lights on. It’s no longer just the price for a watt, it’s also the avoided cost of power outages.
"Organizations still struggle to understand what that value is," Abiecunas said. "You know, how much does it cost me if my bank branch is offline for a day? Or, what is it worth to keep my gas station online? I think more organizations are starting to think of on-site energy as kind of an insurance policy against those events, and they’re willing to pay something for that and compare it to not just their energy stack, but their insurance stack, too."
Wingate hopes Schneider's energy as a service model will help persuade consumers to take the leap to microgrids at once instead of piecemeal.
"A lot of people with the value stacking might start off saying, ‘I just want to do X, and I’ll do something later. I’ll put solar on my roof, then I’ll add a battery, then a fuel cell,’" Wingate said. "With energy as a service, we’re finding you can bundle things together so you can maximize the value sooner, rather than delaying things in the future."