How utilities should prepare for the next DER decade

The need for decarbonisation to mitigate climate change is driving an increase in the deployment of renewables and distributed energy resources (DERs). However various challenges are hindering optimum DER rollout, operation and management, threatening utility operations, and the achievement of sustainability goals. We explore some of the main trends that will shape the DER and utility sector through 2030.

Eric Young, vice president of industry solutions at Generac Grid Services, believes that the majority of renewable energy installation and greenhouse gas emissions reduction targets set globally will not be met despite a huge influx of DER capacity in recent years and over the next decade.

Young predicts the majority of states in the US will fail to achieve an 80% renewables target set for 2030.

Speaking in a webinar hosted by research firm Guidehouse Insights, in which industry stakeholders discussed DER market opportunities, challenges and how DERs are disrupting the energy landscape, Young said: “It is going to be difficult to achieve 100% renewables but the goals being set will push utilities closer to system efficiency, stability, and security.”

He said by 2030 the industry will still be arguing about protocols to use for DER communication and companies will still be struggling with deployment and control.

What needs to be done

He added that the industry needs to ensure there is no vendor locking but that there are rather partnerships between a utility and various solution providers in DER deployment and operation encouraged.

Partnerships with multiple technology vendors encourage innovation, the development of new capabilities and interoperability of various services and assets, a development that will help utilities to optimise DER control and operation, he said.

“Technology interoperability will get industry stakeholders where it needs to be and allow DERs to communicate in real-time which is fundamental to the achievement of renewable energy goals,” added Young.

“What we need in the industry is a system that scales and that enables utilities to get multiple value and revenue streams out of a single asset or platform.”

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Technologies being deployed by utilities need to enable them to modify services being delivered to the market today whilst ensuring stability and security in a rapidly changing landscape, he added.

Regulation and workforce re-skilling

Jessie Mehrhoff, ecosystem and product marketing manager at Generac Grid Services, said failure by the industry to achieve 2030 or 2035 renewable energy goals will be less of a technology challenge. Instead, national, regional, and international policies will determine the outcome.

According to Mehrhoff, policies need to push the utility rollout of DERs and encourage their participation in wholesale markets.

Despite calls for regulators to create a favourable atmosphere that will allow renewable energy targets to be met through the increased rollout of DERs, Michael Goldman, director of business development and regulatory at Generac Grid Services, said regulation has so far played a huge role in enabling the industry to achieve DER rollout milestones recorded to date.

Goldman said owing to supportive regulation, the renewable energy market has over the past ten years accelerated at “lighting speed” and he expects recently enacted policies such as President Joe Biden’s Infrastructure Bill to continue to speed up the energy transition by intensifying DER penetration.

He said the ‘Build Back Better’ policy will also pave way for billions in investments to be directed towards clean technologies and infrastructure such as storage.

Policies will also encourage the introduction of more incentives to support DER installations at local or community level across the US for carbon emission reductions, he added

Mehrhoff added that utilities need to prepare consumers for changes in offerings and train the workforce with next-generation energy skills.

She said: “Equipping staff with smart grid skills will result in grid networks being simpler to operate.”

What has been achieved so far

The pace at which utilities are deploying DER capacity for security, decarbonisation reasons and to remain competitive in a rapidly changing sector is impressive, according to Peter Asmus, research director at Guidehouse Insights and the hosts of the webinar.

Asmus said that more DER capacity including solar PV, energy storage, demand response, and EVs, was brought online in 2021 than centralised capacity.

The amount of DERs deployed so far shows “a shift in the global trends and that in the future we will rely more on DERs as a solution to energy challenges,” he said.

Of the capacity connected in 2021, distributed generation (eg solar, wind, hydro) was by far the largest followed by EV charging infrastructure.

The webinar speakers concluded that utilities are still struggling with the rapid pace at which DERs are penetrating.

However, to remain competitive and to align operations with climate action regulation and consumer demands of green services, utilities need to embrace the market changes.

Find out more about the Riding Out the perfect storm: Are you prepared for the coming DER decade? webinar.