How Electricity Storage Could Make Or Break Power Utilities
Electric utilities have been through the wringer the last few years, and while some have weathered it better than others, all have come out with bruises. That’s the bad news. The good news is that utilities have the benefit of hindsight – they can learn the lessons from the past. Evidence suggests that many indeed are.
I’m referring to the challenges that utilities are facing on the distribution side because the traditional model has met its expiration date. Operating as they currently do, many utilities are facing technical and financial issues around their ability to effectively balance the volume of distributed generation from residential solar panels, that’s being dumped on the grid network. At the same time, ageing infrastructure is putting reliability at risk, while regulations are limiting utility companies’ ability to innovate and expand into new products and services to meet changing consumer habits and expectations.
Accenture ’s latest Digitally Enabled Grid research suggests that unless the industry undergoes a digital, regulatory and business model transformation, we’re at risk of rising pressure on supply reliability and prices.
One solution lies with the very same technology that, if not harnessed properly, could also amplify this disruption – electricity storage.
The industry has talked about storage as a potential key disruptor for years. Given its costs were largely prohibitive and its widespread adoption unlikely in the short-term, most focused on the more immediate threat to business models – the growth of distributed generation through residential installations of solar photovoltaics (PV).
Accenture’s economic modelling has shown that the falling price of storage technology could further strengthen the economics of residential PV deployment. Especially in places where the price for selling renewable generation back to the grid is lower than the retail price, or places where the utility charges a premium for electricity consumption during periods of peak demand.
As consumers invest in storage and are able to use stored electricity instead of purchasing it from the grid at times of peak demand and price, distribution businesses will face a decrease in demand and consumption on the network, putting their revenues at risk.
Solar plus storage could equal a crisis for the utilities’ distribution business, unless they get on board and convert the threat into an opportunity.
Read full article at Forbes