In 2015, the Smart Grid Will Face New Threats and Make More Progress

smart grid reportTwo reports published last week detailed anticipated advances in smart grids in 2015, while also pointing to major challenges that threaten to keep our power system stuck on stupid.

In a white paper, Navigant Research explores a host of smart-grid trends to watch in 2015 and beyond, highlighting both positive and negative signals – though mostly the former.

“Indeed, it is a fast-moving industry in many respects – technological breakthroughs and innovations emerge almost daily – and yet, the utilities expected to implement these new systems and build ever more intelligent (reliable and efficient) grids move at a relatively slow pace,” noted the report.

“This is not to say that utilities are dragging their feet when it comes to upgrading their systems,” it added. “The harsh truth of the matter is that most utilities worldwide are saddled with 100 years of embedded regulatory schemes, infrastructure designs, and industry culture. It just does not change overnight – and yet, looking ahead, it must.”

The first major trend Navigant forecasts is that utility customers will continue to break their chains as utilities’ “captive customers” in the still-prevailing, one-way, centralized power-supply system.

“Once-passive electric utility consumers are becoming proactive consumers” – which the report calls “prosumers” – primarily by generating their own electricity with rooftop solar electric systems. “With federal tax credits for solar panels set to expire at the end of 2016, growth in the number of prosumers will likely accelerate through 2015 and 2016,” projected the report.

However, this “prosumer trend” threatens to become very disruptive, “as utilities must adapt their grids for the two-way flow of energy” and must provide compensation through net energy metering.

On the other hand, according to the report, utilities will increasingly leverage advanced metering infrastructure networks “for a whole host of new applications – including greater customer engagement, data analytics, demand response and time-of-use pricing. “ This, in turn, will increase utilities’ need for “increasingly complex and interoperable IT systems, the need for more robust communications networks, and greater collaboration between formerly siloed teams.”

But evidence that the advent of smart grids is causing immense friction in the marketplace between insurgent and incumbent players can be seen at the highest levels of government.

For example, the Navigant report points to the immediate threat to still-infant demand response markets after the U.S. Court of Appeals stuck down federal regulation – FERC Order 745 – last May. The regulation helped to foster market by requiring wholesale energy markets to pay the same for demand response as for electricity generation.

“Should the worst-case scenario play out, and DR is disallowed from all wholesale markets, ramification would be notable. States and utilities would have to fill the void, which could take months or even years to enact, and DR providers would have to drastically alter their business models.”

The saga could crescendo this year, since the Obama administration just last week asked the Supreme Court to dismiss the district court’s decision.

Meanwhile, the non-profit Smart Grid Consumer Collaborative is evidence that utilities, smart-grid technology vendors, regulators and advocates at least are coming together to discuss the most critical issues and common goals outside the courtroom and other litigated proceedings.

The organization, with its diverse membership representing a broad spectrum of smart-grid stakeholders, in its inaugural annual report outlined a new three-year strategic plan starting in 2015.

In addition to collecting information about consumer attitudes, behavior and experiences with smart grids, the group aspires to provide “thought leadership” to the nascent industry. The strategic plan foresees “connecting with smart-grid industry stakeholders and facilitating dialogue to identify shared objective, shared experience and overcome obstacles to consumer engagement.”

Author: Garrett Hering

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  1. […] In 2015, the Smart Grid Will Face New Threats and Make More ProgressSolarenergy.net, on Tue, 20 Jan 2015 07:40:04 -0800Two reports published last week detailed anticipated advances in smart grids in 2015, while also pointing to major challenges that threaten to keep our power system stuck on stupid. In a white paper, Navigant Research explores a host of smart-grid … […]

    Pingback by In 2015, the Smart Grid Will Face New Threats and Make More Progress - Smart Grid Journal on January 21, 2015 at 3:21 pm

  2. […] Two new reports, one from analyst firm Navigant, and one from the Smart Grid Consumer Collaborative, detail what 2015 may hold for the smart grid.  […]

    Pingback by In 2015, the Smart Grid Will Face New Threats a... on January 23, 2015 at 6:24 am

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