An IEEE Smart Grid survey conducted by consultancy Zpryme, titled "Power Systems of the Future: The Case for Energy Storage, Distributed Generation, and Microgrids," and issued last month would appear to reflect a global interest—one might say inevitability—in adoption of these distributed technologies.
As such, I'd conclude that distributed intelligence will also grow to accommodate these resources and that integration experts and third parties will find the power industry an inviting field for decades to come. Particularly as energy management, distribution management and communication systems are also forecast as the enablers.
The report's opening summary puts it this way: "Collectively, energy storage, distributed generation, and microgrids will drive the evolution of energy markets over the next five years. These technologies will increase the adoption of the smart grid, and spur new markets for software and systems that integrate these technologies into modern and future energy systems."
That statement is backed by the finding that nearly 70 percent of 460 power executives around the globe said in an online survey that storage and distributed generation are "very important" to smart grid development, while 50 percent said the same for microgrids. If one combines the respondents who said "very important" with those who said "somewhat important," the numbers are 94 percent on storage and distributed generation and 88 percent on microgrids. Wow.
To me, these findings also raise anew a few essential questions that power providers face, whether they're investor-owned, municipal or cooperative:
What relationship, precisely, do utilities want with their customers?
Are the rapidly increasing technical challenges posed by the integration of distributed resources great enough to force a choice in favor of infrastructure building and operations, leaving the customer relationship to third parties?
Are the capital investments required to address these technical challenges as well as investments in hardening and resilience of a magnitude that partners will be needed?
Are these choices still utilities' decisions to make? Or is the complexity and level of investment needed for the grid, and utilities' traditional, non-approach to customers such that a scramble to find dance partners is inevitable?
More from the IEEE Smart Grid/Zpryme report on energy storage: top-rated benefits are meeting peak demand, improving power reliability and reducing costs. Hurdles: costs, deployment and a lack of standards. Lithium-ion will see the most demand over the coming five years. Respondents think North America will see the most growth in lithium-ion-based storage in that period. Where's the money? Respondents think government-backed R&D, industry R&D and private/venture capital will provide it. (See last week's column, "Electric Vehicles: Looking Back, Looking Forward, Part II," for a new public/private partnership on R&D for energy density in batteries.) Systems needed to integrate storage, according to respondents, include energy management systems, distribution management systems and communications technologies. Call that the "third-party sweet spot."
Distributed generation's advantages are introducing new supplies where needed, reduced infrastructure costs and improved power reliability. Interestingly, respondents named solar and wind power as the mid-term likely sources, but in Europe, not North America. The same systems needed for energy storage are repeated for distributed generation, which sounds like good news for grid operators. Deployment is most likely among hospitals, military and non-military government agencies and utilities. Again, Europe is named as the likely market mover for the next five years. Standards are even more important for microgrids than for storage or distributed generation. Add sensors to the list of needed systems named above. The "cloud" is named as an enabler.
Funding partners remain critical to the deployment of these technologies, according to the survey's respondents. "Aggressive smart grid deployment, emission reduction and renewable resource targets" are driving demand on both sides of the Atlantic, where advanced power grids are viewed as enablers of innovation, energy independence and economic security, according to the survey.
All this paints an intriguing portrait of the power sector over the next 60 months, according to utility executive themselves. They seem to be acknowledging a much more complex ecosystem going forward than is readily apparent from their public face, in my view. I don't think that, for instance, the current utility stance in the U.S., to the degree it can be generalized, really says much about whether IOUs here will attempt to "own" their customers. The switch from "ratepayer" to "customer" in the industry lexicon is encouraging, but the provision of customer energy use data online is a pretty paltry step if actual engagement is sought. But the apparent gap between industry executives' views on storage, distributed generation and microgrids certainly seem to reflect acknowledgement that end-users' and third parties' roles will become substantially more prominent.
How all this affects the current, IOU business case really becomes, perhaps, the most interesting outcome.
Intelligent Utility Daily