By - Jim Vess

Black & Veatch: DER the single biggest accelerator of change

Energize Weekly, February 15, 2017

The major concerns of utility executives remain traditional ones—reliability, security, infrastructure and environmental rules—but new technologies and distributed generation are roiling the industry, according to a survey by Black & Veatch.

“It’s the arrival of environmentally conscious microturbines, fuel cells, photovoltaics, wind turbines, improved energy storage and other advanced power technologies—all pushing distributed generation toward parity with traditional utility generation—that is arguably generating the most attention,” the survey said.

The “single biggest accelerator of change” in the industry may be distributed generation and distributed energy resources, according to the Overland Park, Kans.-based engineering firm’s 2016 Strategic Directions report and survey.

Black & Veatch calls its annual survey a “snapshot” of the state of the electric utility industry. This year 672 industry stakeholders—from investor-owned utilities, cooperatives, publicly-owned utilities and independent power producers—participated in the online survey.

The biggest concerns of the respondents, as it has been in past years, was reliability, followed by cybersecurity, aging infrastructure and environmental regulations. Often these concerns are tied to the technology trends in the industry.

For example, 83 percent said the trend in retiring coal-fired power plants, in large part due to environmental regulations and cheap natural gas, as well as nuclear plant closures would have an impact on reliability.

And some of the reluctance to adopting more distributed generation, such as rooftop solar or shared community solar, the survey says, is due to the “uncertainty about whether these changes can meet the expectations of an always-on, always-connected society that demands 100 percent uptime.”

The result is that even though there is a focus on the new technology and distributed generation, the pace of change appears to remain slow.

While 39 percent of investor-owned utilities have distributed generation pilots or demonstrations, an equal number see it as a risky investment or simply have no plans to pursue it. The numbers are even more pronounced for cooperatives surveyed where 55 percent of respondents saw it as a risky investment or had no plans to pursue it.

Publicly-owned utilities provided a marked contrast with nearly half having demonstration projects and 22 percent seeing it as a significant part of their generation investments in the future.

And as for those coal plant retirements, 36 percent of respondents said their utilities had no plans to close units or expected to add coal-fired capacity. Another 30 percent said that planned to close coal-fired units, and 36 percent said they planned to repower or sell coal-fired plants.

Still, even among those utilities that said they were shuttering coal-fired plants, 45 percent said it would take six to 10 years to do it. Another 21 percent said it would be more than 10 years to retirement.

Change may appear slow, but many utilities are at least taking “halting steps” to the new technologies, the survey found.

“Utility leaders across the United States and the world recognize that solar, wind, microgrids and distributed generation are prominent in the new discussion around resource efficiency, and customers are compelling their infrastructure providers toward sustainability,” the survey says.

For example, microgrids are “becoming a powerful tool for utilities and energy consumers across a spectrum from grid-scale non-transmission alternatives to smarter energy systems for industrial, commercial, water and wastewater treatment, and campus facilities,” according to the survey.

Fifty-six percent of the survey respondents said microgrids—a local grid with control capability so it can disconnect from the larger grid and operate autonomously—were already a viable business opportunity or would be in the next five years.

Similarly, utilities see electric vehicles as an untapped source of revenue. “A large number of them see opportunity in the transmission and other infrastructure necessary to support a larger EV fleet,” the survey says.

And with the advent of smart meters and home energy management devices, such as programmable thermostats, customer billing operations are becoming “differentiators” for electric utilities. “Modern customer information systems give utilities a platform to strengthen business performance and to improve customer engagement,” the survey says.

As for cybersecurity, the survey found that “some of the strategies we are seeing to address cybersecurity include physical hardening at facilities, work to segregate risky networks and risk reduction through the construction of strong vendor service-level agreements.”

Leave a Reply

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. more information

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. We use cookies during the registration process and to remember member settings.