One of the most contentious issues for renewable energy is how it should be developed to address the issues of climate change. A new study, Utility of the Future, introduced last month by the MIT Energy Initiative and the Institute for Research in Technology at Comillas Pontifical University looks into how to best integrate distributed energy resources like wind, solar and the technologies to enable better integration of those sources like energy storage.
“The study’s two overarching recommendations are to establish a comprehensive system of prices and regulated charges that applies to all network users, and to remove inefficient barriers that impede the integration and competition of both distributed resources and centralized resources, such as power sector structures that prevent fair competition and wholesale electricity market design flaws,” explained Ignacio Pérez-Arriaga, report co-author, visiting professor at MIT and electrical engineering professor at Comillas. “Our framework of recommended proactive reforms can enable the efficient evolution of electric power systems into the next decade and beyond.”
Those proactive reforms include changing tariff and rate structures for electricity services in a “technology-agnostic” manner based on how consumers use these services. MIT has previously advocated for similar reforms in other reports.
The report also recommends utilities and policies should implement peak charges to help change consumers’ use of electricity. By increasing prices for electricity when demand is high and more expensive generating facilities need to be brought online, it can discourage consumers to use too much electricity at these periods. “Such cost-reflective pricing can open up opportunities for distributed resources—many of which already exist but are not responding to current economic signals—and enable significant cost savings,” the report advised.
“There are great opportunities to deploy distributed energy resources where they will be most cost-effective and impactful, and also to scale up new information and communications technologies that can provide greater flexibility, control, and cost savings for power businesses and consumers alike,” stated Robert Armstrong, MIT’s director and the Chevron Professor of Chemical Engineering at MIT. “Our study does not try to predict the future or prescribe which technologies should prevail; instead, it provides a toolkit for businesses, policymakers, and regulators to navigate the unfolding changes in the system and develop a more robust, efficient system for the future.”
While the report stated that its goal is to “all resources, be they distributed or centralized,” it’s approach and recommendations were criticized by some. “The recommendation parrots an oft-used (but equally often disproven) argument that utilities make that distributed-generation (DG) solar users shift the burdens of utility-generated electricity-system upkeep to non-solar customers, a claim that at least 16 state-level studies have found to be mythical,” argued Frank Andorka at PV Magazine.Tweet