According to a recent poll, 95% of global utilities executives agree that the rate of electricity customers making changes to go off the grid and only using it as occasional backup will increase significantly in the next two years. Implementation of distributed generation (DG) technologies, such as having one’s own generation unit and solar and battery power, is increasing greatly in recent years, changing long-term strategies for utilities in terms of building new grid capacity to handle increases in electric demand. Nearly half of the respondents said that parts or all of their grid will reach maximum capacity in three years or less.
Of course, this is what most utilities wanted when they encouraged customers (residential and commercial) to install solar or their own generation units in order to relieve their stress on the grid, particularly on peak demand days. It is beginning to bear fruit in terms of the amount of investment in expanded grid infrastructure.
Other reports estimate the proportion of total (residential and commercial customers) with rooftop solar photovoltaics could exceed 15% by 2036 in some markets, such as California, reducing future net electricity demand growth and the need to invest in new power plants or related infrastructure.
A challenge for any utility is to predict just what that growth will be. Accurate modeling can help a utility forecast more accurately what their long-term capital spending needs will be. Such accurate modelling can save a utility a lot of costs or interest from borrowing and, thus, can predict future rates better. This need was ranked as the second-highest cost-saving opportunity for utilities, behind only improved forecasting of materials and fuels (supply chain unit costs).
Utilities acknowledge that DG represents a challenge to distribution utilities, providing service to customers getting their electricity from a different source, as a backup only during failure. Utilities must maintain this infrastructure and deliver when required, even if they charge little for the service. Yet it is also an opportunity, as many utilities are moving into this area as a potential growth and profit center. More than half of the respondents globally identified an ownership stake in areas such as large- and small-scale DG and community and grid-connected storage.
CCES has the experts to help your firm control its energy usage and cost and provide technical services to determine if implementing DG is in your financial interest. We can also provide you with information on incentives for solar, wind, or your own generation in your specific area. Contact us today at 914-584-6720 or at karell@CCESworld.com.