More than 90 percent of utility and stakeholders anticipate that distributed energy resources (DER), like rooftop solar power, will cause a major change to utility business models. Rooftop solar is expected to be the most prevalent form of distributed energy by 2025. While utilities see the looming changes, many appear to believe that their key responsibilities will remain the same.
Those figures come from a preview of the Navigant Consulting and Public Utilities Fortnightly (PUF) report, the “State & Future of the Power Industry,” which debuted at the Edison Electric Institute (EEI) Annual Convention. The full report will arrive July 5. The report is based on “off-the-record” conversations with PUF editor Steve Mitnick and utility leaders, a PUF reader survey and perspective from leaders within Navigant’s Global Energy practice.
"This study points to several forces that will continue to transform the way utilities do business. Although DER is already growing faster than central station generation this year in North America, this trend varies by region as the policy approach, regulation, market dynamics, and structure vary,” explained Jan Vrins, leader of Navigant’s Global Energy segment. “North American utilities are at various stages of integrating distributed generation, demand response, energy efficiency, electric vehicles, and energy storage.”
“Many are unprepared for the dynamic impact these resources will have on integrated resource planning and current grid operations,” Vrins continued. He said the report will help utilities develop their distributed energy strategy based on their needs and market.
Fully 70 percent of respondents to Navigant and PUF’s survey said they anticipated that solar energy will be the most prevalent form of distributed energy by 2025. Respondents anticipated that forms of distributed energy also will grow in prevalence. For instance, 42 percent said energy efficiency will grow significantly, 40 percent named demand response and 39 percent named energy storage as other prevalent demand response systems in terms of capacity by 2025.
Despite overall agreement that distributed energy will force utilities to change their business models, the survey found the utilities do not anticipate significant changes in how they deliver services.
“The lack of urgency to change the services offered to customers surfaced in this report is concerning," Vrins said of the findings and utilities’ viewpoints. "Providing reliable, safe, and affordable power are table stakes, and utilities must evolve their business models to include sustainable, intelligent, and distributed elements of the energy cloud in order to serve their customers and protect shareholder value.”
One other key finding is that nearly 50 percent of respondents said that a supportive regulatory environment will be the most important tipping point for them to move aggressively into owning and operating distributed energy sources.Tweet