Distributed Energy Resources

Distributed energy: Boon or bane for utilities?

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Technologies such as distributed energy resources, demand response and distribution automation are driving a paradigm shift and requiring electric utilities to rethink their future. Environmental and security concerns are steering business imperatives even as traditional goals of safety, efficiency, and reliability remain critical.

Customers are increasingly engaged and environmentally conscious, demanding that their utilities transform from just commodity power suppliers to innovative service providers. The grid has become “smarter” and that means utilities can’t simply go on with business as usual.

“I’ve seen more change in the last five years than I saw in my first 25,” says Joseph Zerdin, distribution planning manager at Hydro One, a Canadian utility that was an early adopter of smart metering followed by distributed energy. Hydro One is now considering the challenges and opportunities of “net zero” communities and commercial microgrids.

“It’s becoming a very complex system, almost like a whole series of multiple micro transmission systems and so the challenges of understanding it, of integrating it, of monitoring it, and doing that all cost effectively, are demanding,” Zerdin adds.

Much of this complexity comes from the push-and-pull towards distributed energy resources.

“It’s a transformational concept that’s affecting transmission and distribution, but especially distribution,” says Julio Romero Agüero, vice president of strategy and business innovation at utility infrastructure consulting company Quanta Technology, which is based in North Carolina.

“Historically the key driver behind distribution was load growth, which was very predictable and utilities would build facilities, distribution lines, substations to supply that load growth and all the investment in control and monitoring was made on the transmission side,” said Agüero.“Today things are different because many of these distributed resources are behind the meter and true load growth is being masked.”

Hydro One’s Zerdin believes the distribution grid is turning dynamic in response to customer needs. “Our client commercial factories are becoming a lot more complex, intelligent, and sensitive to system glitches and we need to monitor our systems at least parallel to the level they are monitoring their own,” he said.

The same goes for customers who are more environmentally focused. “How do you enable solar panels? How do you enable the wind turbines? The electric car charging stations?” asks Zerdin.

To manage all that diversity, utilities need to know what exactly is happening on the distribution grid, which is driving the need for real-time monitoring, automation, protection and control capabilities. Technologies like smart switching and protective devices, smart sensors, and intelligent controls are combining with analytical and simulation software to give utilities real-time decision-making abilities.

This transformation comes with many benefits for the grid: greater energy efficiency, asset deferral, enhanced reliability and resiliency, and reduced outage management costs. But some utilities think of DER technologies as troublemakers, as disruptors.

“As a utility, you have to investigate these technologies, analyze them and have a position,” said Agüero. “That position may very well be — we are not interested — but you need to explore.” Utilities that don’t explore run the risk of being caught unaware or missing out on an opportunity to increase revenues or serve their customers better, giving third party players a window to enter or, worse, an impetus for customers to go off-grid.

“It’s not unimaginable if the technologies become economically feasible, cheap enough, and reliable enough,” says Agüero. “It happened in the telecommunications sector with people switching almost completely from landlines to cellphones, it can happen here too.”

Many utilities in California, New York, Illinois, Minnesota, Hawaii and elsewhere are already taking a proactive approach to optimizing new technologies to offset some of their capacity issues. Several of these states have launched “utility of the future” proceedings to address the growth of distributed energy resources.

Modernizing a grid to be flexible and integrated to support two-way power flow takes not only technology planning and IT integration but also business planning.

There is much to be worked out in this emerging ecosystem — network models, monetary systems, feeder automation, data management, etc.

Zerdin recommends utilities to start by learning from peer experiences at conferences like DistribuTECH, an annual conference and exhibition that covers electricity delivery technologies and operations from the time the electricity leaves the power plant until it is consumed by the end user.

“The great part is that it’s utility people talking to other utility people, so you learn from each other’s mistakes and you capitalize on each other’s winnings,” he adds. “It’s not white papers, it’s not manufacturers with prototypes, it’s all practical.”

Washington State public power utility Snohomish County PUD is one such utility that will share practical lessons learned from its experiences with energy storage at DistribuTECH, which will take place in January 2018.

“I’ll be sharing how our system works, what batteries we used, what implementation challenges we faced and what out permitting process was,” said Arturas Floria, a substation engineer with Snohomish County PUD.

Snohomish County PUD earlier this year dedicated its second energy storage system, which was installed at a substation in Everett, Wash. Snohomish County PUD said that the system is the world's largest containerized vanadium flow battery system by capacity. The 2.2 MW/8 MWh battery storage system was dedicated in March 2017.

Conferences like DistribuTECH offer a place where you get to learn about innovations and what other utilities are doing, Floria said. “Even if you don’t catch everything, it’s still a great starting point.”

Agüero recommends Utility University, a series of day-long courses at DistribuTECH, as the perfect platform to learn about specific topics from industry experts and utility managers.

“These discussions cover topics that are truly changing or affecting utilities in the way they do business,” he said. “They present a progressive yet realistic vision of the industry.”

Agüero and Zerdin are both set to play a number of roles at the conference. Agüero is scheduled to moderate several panels at DistribuTECH including a session that will look at recent experiences and trends in grid modernization, while Zerdin is slated to be a speaker on a panel that will examine distribution management system issues.

Additional information about the 2018 DistribuTECH conference and exhibition, which is taking place in San Antonio, Texas, is available here.