Distributed Energy Resources Are All about Location
Electric utilities designed and built the power grid over the last 100 years to deliver electric power from generating stations to their customers. It was never intended to receive power from customer end points. Historically this is a one-way flow of power entirely planned and built by utilities. Technology is now enabling new distributed energy resources (DERs) that also produce electric power. These energy-producing devices are far different than traditional power plants. DERs include solar panels, wind turbines, energy storage systems (batteries), demand response, and even electric vehicles. Renewable forms of power are very popular as customers consider ways to reduce their utility bills. The number of these new generators grew very rapidly in recent years, and experts expect this trend to continue and accelerate. The installation of rooftop solar panels alone connects hundreds of new power-producing devices to the one-way grid every day. Under some conditions, they cause power to flow backward on a network that was never designed for two-way power flow.
DERs are typically smaller resources connected to the grid across the electric system in contrast to centralized power plants. Prosumers are a new class of customers who both produce and consume electricity. Prosumers install these systems because of their personal needs and wants, not those of the larger grid. This independence puts DERs well outside the traditional utility planning and control processes and raises some questions:
- Where will the next solar installation pop up?
- How much power will it produce tomorrow?
- How will it affect other customers in the area?
These questions create a great deal of uncertainty in what used to be a predictable industry. Experts agree that the grid needs to be modernized, and utilities need new tools to continue providing excellent reliable service as distributed resources increase.
While DERs create additional complications for the grid, they hold a lot of promise to help address the issues facing the grid. They can help meet future customer load growth and offset costly network reinforcements. DERs can also add tremendous value by increasing reliability, reducing greenhouse gases, and increasing customer choice.
Think about how much you use your phone today compared to just 10 years ago before the smartphone was introduced. Cellular technology disrupted the old copper wire telephone monopoly by bringing incredible new services and choices to customers. In recent years, over 50 percent of households stopped using and, therefore, stopped paying for a "home" phone line. That change and the staggering loss of revenue hit telephone companies hard. That same kind of change, and the related change to revenue, is underway in the electric utility industry now.
DERs enable choices for electric utility customers, changing the electric business the way cell phones changed the telephone business. Distributed customer-owned resources require utilities to change the way they plan the grid, operate the system, and even collect revenue in the future.
An important insight is to realize that the grid's ability to accept this new generation is very dependent on location. At certain locations, DERs are a real boost for the power grid since they help reduce power demands, and their installation should be incentivized. At other locations, DERs have the opposite effect and actually create more problems than they solve. DERs cause overloading and power-quality problems and should be discouraged.
Installing DERs Is All about Where
To realize the maximum benefits of DERs, stakeholders are working together to develop new approaches. In states that are leading the way (CA, AZ, HI, NY, MA, MN, OH, DC), regulators require utilities to analyze their systems in new ways and begin publishing GIS maps to help customers place DERs in optimal locations. These requirements will undoubtedly follow for utilities all over the globe. Utilities need new ways to monitor, evaluate, and optimize a complex grid of interconnected resources. They also need new ways to share information and communicate valuable insights to regulators and customers alike.
The situation is ripe for new tools to increase collaboration between all stakeholders, including the public, and realize the promise of DERs technology. Smart utility operations begin and end with location intelligence. ArcGIS delivers a complete solution with outstanding analytical capability. The ArcGIS platform provides instant access to all types of information. It provides immediate feedback and awareness of what's going on, particularly about the behavior of DERs. It provides advanced analytics to give all stakeholders a better understanding of their present and future impact. Finally, the platform fosters collaboration about the location value of DERs.
For more information on how the ArcGIS platform provides additional capabilities for electric companies download our free utility ebook.