Oftentimes utilities are seen as opposed to distributed energy resources (DERs). Since they run counter to the centralized energy generation structure they’ve grown accustomed to over the past century. That’s starting to change, according to a new report from GTM Research, which found that utilities in the Europeand North America invested $2.9 in DERs since 2010 with $1 billion in investments in 2016 alone.
“Utility companies have a reputation of being risk-averse, but it’s clear that many utilities see distributed energy as a growth opportunity, and are taking new, yet calculated risks through venture investments,” said Andrew Mulherkar, GTM Research senior grid edge analyst and report co-author, in a blog about the report.
In GTM’s new report, Utility Investments in Distributed Energy: Trends Among North American and European Utilities, it shows that the investment arms of 42 utilities in North America and Europe have invested in DERs. This includes US companies like Exelon and Southern Co., which have invested at least $257 million and $472 million, respectively, and European companies like Engie, which has invested at least $491 million in DERs, according to the report.
The overall investment levels could be even higher, according to Shayle Kann, senior vice president of GTM Research and report co-author. “While some of these investments are being made by in-house investment arms of utilities, there’s a parallel trend of investments made by third-party investment firms acting on behalf of the utility. This flow of capital from both utilities and investment firms parallels the broader support for decentralization from the global investment community,” he said.
The report illustrated that utilities are showing more interest in and investing in companies and technologies that help customers save, modify, generate and store their own electricity in new ways. While many of the investments are smaller investments in companies, the report showed that 37 distributed energy companies have been acquired by utilities since 2010.
The report also showed that European utilities have invested more, at least $1.78 billion, in distributed energy companies, where North American utilities have invested at least $1.1 billion in such companies. However, the report noted the North American utilities have made more such investments overall and have made more investments in solar power companies.Tweet