The utilities landscape is changing fast as more consumers, both commercial and residential, are starting to capture and store their own energy. This trend presents both opportunities and challenges as the relationship between utilities companies and consumers becomes a two-way street through distributed energy resources.
Integrated properly, these new sources of clean energy can help utility companies as they make the switch to renewables, build grid resiliency for the local community, and more.
Solar is pulling its weight in the transition to renewable energy as it made up 67% of all new electricity-generating capacity added to the US grid in the first half of this year, according to the Solar Energy Industries Association.
Additionally, the International Energy Association found that 167 gigawatts of distributed solar photovoltaic energy systems were installed around the world between 2019 and 2021. To put this in perspective, the maximum output for these systems generates more energy than is consumed in France and Britain.
Energy is at an inflection point, as utility companies with their power plants and transmission lines are no longer the only generators.
As homes and businesses generate more energy from diverse sources for their own use, they sometimes have surplus that they can sell to energy companies.
These surplus forms of energy are beneficial for the transition to renewables and keeping the lights on in the local community when the grid is stretched too thin.
As the U.S. Environmental Protection Agency notes, using local energy sources reduces waste that can happen when energy is delivered over long distances.
There are many reasons why DERs are becoming popular, including:
So who are these consumers driving the distributed energy resources trend and how can utility companies tap into their extra energy?
The “prosumer” is someone who’s both a producer and consumer. In the case of an energy prosumer, it can refer to either a commercial or residential customer who is generating their own energy by investing in DERs.For example, commercial energy prosumers and some larger scale residences can store excess energy with photovoltaic solar panels and EV batteries, and then sell the excess back to a utility company.
Making the two-way energy marketplace more efficient and profitable will help utility companies transition to renewables that much faster. Energy prosumers have already bought into the road to net-zero; that’s why they invested the time and money into distributed energy resources. Utilities companies just need the right solutions in place to harness the potential of prosumers’ energy resources and tap them when there are higher than average energy needs.
If utility companies can rely on energy prosumers to contribute a consistent amount of energy, they can meet their renewable goals sooner and reduce costs for their day-to-day operations.
This requires data sharing, modeling, and communication to create a path toward reliability.
There are many ways energy companies can manage DERs and support prosumers, such as providing energy calculators (for example, to show a business how much less it would cost to charge an electric fleet at off peak hours). They can also implement data transparency tools that can help identify risks to address and ways to improve the partnership and grid efficiency over time.
When armed with data from smart devices and data analysis tools, consumers can better understand and optimize their energy demand.
The transition away from fossil fuels to renewable energy is a when, not an if. What energy companies do now to differentiate themselves and set a foundation for the future will separate the leaders from the laggards.
There are definite challenges involved in inviting prosumers into the energy process, including the risks and inefficiencies that utility companies have had to iron out over the years as they switch to renewables.
But with this partnership in place, prosumers can better understand best practices and tap into the tools utility companies use that help them improve infrastructure and detect issues.
Many companies and government organizations are working to make distributed energy resources more common. One such project is BeFlexible, an EU Horizon funded project that seeks to innovate within the DER space.
Over the course of four years and with a roster of 21 partners (including SAP) across 12 pilots, the project aims to help energy customers set up a grid data platform that will create flexibility and help monetize value. For energy generators, BeFlexible is working to integrate DERs in a timely manner, while aligning with national and EU decarbonization goals.
More efforts like these are needed to get utility companies and energy prosumers on the same page to create a smart grid and meet growing energy demands.
The rise of distributed energy resources produced and distributed by prosumers can benefit both energy companies and the prosumers themselves. With better communication and storage capabilities, the two sides can improve the power grid overall and ensure prosumers get the best possible value from being energy contributors.
AI and data-driven solutions will play a big role in driving the DER trend. Intelligent technologies will help utilities companies and prosumers collaborate effectively and create a future with a much higher mix of renewables.
