Breakthroughs in generation and system integration are driving the utility of the future, analysts say
Decarbonization goals driving the growth of renewable generation along with customer demand for distributed energy resources (DER) are reshaping what electric utilities can be.
For the emerging utility of the future, the flexibility of DER will protect reliability and lower customer costs by balancing renewables’ variability, utility representatives and power system analysts said.
Flexible customer demand is moving utilities “from a world where we forecasted demand and scheduled supply to a world where we will forecast supply and schedule demand,” said Mike Hogan, senior advisor to the non-partisan Regulatory Assistance Project (RAP). Utilities can learn to “forecast supply, price energy appropriately, and allow demand to respond to it.”
But electricity providers must also learn to take advantage of these new dynamics and the proactive customers that are also producing electricity, also known as “prosumers”, power system stakeholders agreed.
“Utilities have been providers of a commodity called electricity, and there have been few options to get it elsewhere,” said Bryan Hannegan, president and CEO of Colorado electric cooperative Holy Cross Energy. But with new technologies and policies that allow generating and storing electricity at home and managing it with smart devices, “utilities must find ways to remain relevant.”
Two breakthroughs — divesting generation ownership and integrating system operations — are transforming today’s electricity providers while protecting reliability and affordability, utility representatives and system analysts said. But the evolution to a “utility of the future” will only be completed by how utilities respond to still-emerging technologies, changes in policy and new customer demand, they added.
Data show U.S. renewables and decarbonization goals and mandates are working by increasing the clean energy deployment that will reduce emissions.
Utility-scale renewables were over 87% of the 19 GW of new U.S. generating capacity in the first nine months of 2021, according to the Federal Energy Regulatory Commission’s (FERC) September 2021 Energy Infrastructure Update.
Renewables are now over 20% of U.S. generation, according to a January 2022 Energy Information Administration report. And while the shares of natural gas, coal, and nuclear generation are forecast to decline, utility-scale renewables are expected to rise to 23% of U.S. generation this year, it showed.