There are many drivers for investing in distributed energy resources, but it’s always interesting to take the pulse of the industry to assess current thinking. Last month Enbala took advantage of the large number of utilities attending DistribuTECH 2017 in San Diego and asked attendees to weigh in on which utilities are investing in distributed energy resources (DERs), what types of DERs are in the mix and key factors underpinning successful integration of DERs. More than 100 attendees took the survey, whose results uncovered some very interesting facts about where the industry is today and where it might be heading.
This week's blog is authored by Rick Nicholson, Global Product Management and Marketing, Enterprise Software, for ABB. We asked Rick to provide his insights on ABB's newly announced investment in Enbala.
ABB recently announced an investment in Enbala, made through ABB’s venture capital unit, ABB Technology Ventures. The announcement also mentioned that ABB and Enbala are joining forces to develop a new distributed energy resource management system (DERMS). The joint solution will combine the benefits of Advanced Distribution Management Systems (ADMS) and DERMS to enable utilities, energy service companies and grid operators to efficiently manage the entire lifecycle of distributed energy resources, like solar, batteries and wind, while ensuring the safe, secure and efficient operation of the electric distribution network. It will also enable more active participation from energy consumers.
A stronger, smarter, greener grid
Why did ABB make this investment and choose to partner with Enbala to develop a DERMS solution? The answer to this question is based on the current state and expected evolution of distributed energy resource management.
Keeping up with the influx of new information on distributed energy resources (DERs) can be daunting. DERs are physical and virtual assets that are deployed across the distribution grid, typically close to load, and usually behind the meter, which can be used individually or in aggregate to provide value to the grid, individual customers, or both. A particular industry interest seems to be centered on DERs — such as solar, storage, energy efficiency, and demand management — that can be aggregated to provide services to the electric grid.
The energy industry’s focus on DERs is a function of how important it’s become to understand the potential capabilities they have to offer. In 2015, U.S. electric utilities spent $103 billion in capital expenditures to maintain and upgrade the grid — and they now expect average annual spending of around $100 billion through 2018, even as growth in electricity demand slows.
These two trends combined could raise retail rates significantly for electricity customers, as much as 15% to 30% through 2030, according to one study. To modernize the grid for two-way energy flows and incorporate new, connected technologies, while maintaining minimal rate impacts, all available resources, including DERs, need to be put to best use.
To reach this goal, we need to start with a common base of foundational knowledge on DERs -- key articles and resources that are easily available to all stakeholders -- which is the purpose behind this piece.
Cities around the world, including 22 cities in the United States and a growing number in Canada have pledged to go 100% renewable. It’s a noble, collaborative effort to be the cleanest, most environmentally sustainable cities on the planet, with an ultimate and cumulative end goal of each city doing its part to reduce worldwide carbon emissions.
Many cities that have made the pledge don’t yet have a route to an all-renewables, carbon-free destination. Some don’t have ownership of their electricity providers and thus have little or no influence over power fuel sources. Others depend today on energy sources that are based almost entirely on fossil fuel, making the renewables transition particularly difficult. Still others are dealing with high permitting costs for popular renewable options like rooftop solar, as well with other regulatory obstacles. Technologically, anyone switching to a renewables-based grid must, by default, deal with the intermittency and reliability issues imposed by wind and solar. Even hydro electric energy is generally limited by the amount of water flowing in rivers, a quantity that can vary significantly over time.
A broader question, however, is why a fully renewable grid is more desirable than any other combination of zero-carbon energy sources. And what the overall effort and cost would be to decarbonize via that pathway alone.
Canada’s Prime Minister made a statement recently that caused some problems in parts of Canada. The comment -- “We need to phase out fossil fuel…” -- has raised strong opposition in Alberta, the province that has largely powered the Canadian economy in recent years, based almost entirely on fossil fuel.
Confusing messages are being delivered. Science has told us that we need to REDUCE EMISSIONS. Emissions can be reduced in two ways: use less fuel or use it more efficiently. Politicians, almost uniformly, seem to have decided that the solution is to eliminate fossil fuel and replace it with renewable energy. This transition may be a lot more difficult, time consuming and costly than it may initially appear.
Ontario is perhaps one good example. A large expenditure in wind capacity seems linked to very high electricity prices in the very areas where the wind turbines are located. Germany has seen dramatic increases in electricity costs as the country has increased its use of solar and wind capacity to generate electricity.
The electric system seems to be a scapegoat, largely because in the US, it is the single largest source of emissions. Yet it delivers only a fraction of the energy needed to meet the total energy required.
Surely there is a better way to reduce emissions without producing disruptive cost increases and heavy restrictions on supply.
It’s a new year, folks, and time to learn from the ups and downs of the previous 12 months and set a course for a successful 2017. We spent some time at the end of 2016 working with Edison Foundation’s Institute for Electric Innovation (IEI) on a book titled “Thought Leaders Speak Out: Key Trends Driving Change in the Electric Power Industry.” Enbala’s contribution was a chapter exploring the future of distributed energy in a modern grid.
Ham and eggs. Abbott and Costello. Batman and Robin. Hey, there are a lot of great duos in the world, and here’s another one: building management systems and automated demand response (DR) designed specifically for small- to medium-sized companies.
What makes this a great combo?
CREATIVE FINANCING OPTIONS OPENS THE DER DOOR TO SMALLER BUSINESS CUSTOMERS
We all know the big guys – large commercial and industrial (C&I) customers – have been able to participate in wholesale markets thought demand-management programs for years. Now, small C&I customers are gaining this opportunity, too.
What gives? The financing.
The U.S. election is finally over, leaving some elated and others terrified. The last several months have been polarizing and contentious, and many feel that a Trump presidency is destined to bring uncertainty to the energy industry and endanger the goal many of us share of a more sustainable energy future.
Here are my thoughts on the key reasons why I believe that the distributed energy resources (DERs) market will continue to thrive, along with the march towards an advanced energy economy.
Right now, analysts see enormous growth ahead for solar-plus-storage systems. A report by IMS Research forecasts the market for storing power from solar panels – which was less than $200 million in 2012 – to reach $19 billion by 2017. And, it’s easy to see why.
After all, rooftop solar panels are more valuable to people if they can store the excess energy produced and prolong the benefits of the on-site generation capacity. Plus, the flexibility of battery energy storage makes it truly valuable. With a quick response time and precise controllability, batteries can provide a wide set of grid services, so they can deliver value to multiple participants in the power system, including end-use customers, distribution utilities and wholesale market operators.