The propagation of distributed energy resources and customer energy management solutions requires dramatic changes to power infrastructure, market design, and utility business models. Greentech Media calls this market shift "the grid edge" and outlines its implications in a new free report, The Grid Edge: Utility Modernization in the Age of Distributed Generation. To further define the space and drive the conversation, Greentech Media is bringing leaders from across the industry together to discuss the future of the electricity market in its new Grid Edge Executive Council.
“We are on the cusp of a major transition to a next-generation, distributed, intelligent energy system,” said Rick Thompson, President & co-founder of Greentech Media. “This conversation moves the concept of a smart grid to an entirely new level. Grid modernization in the face of distributed generation will undoubtedly drive technology innovation and business model evolution for the foreseeable future at the grid edge.”
In the report, GTM Research describes this market evolution as one driven by necessity, but hampered by the power industry’s current structure. The parallel proliferation of distributedsolarPV and smart grid infrastructure is well documented, and a host of intelligent energy management solutions have come to market to serve customer interest in gaining increased control of their power. Yet these are typically deployed in isolation, and are at times at odds with current regulatory structures, standards developments, and business practices of utilities and energy service providers. What could be a well-orchestrated migration to the next generation of an electricity system is, more often than not, a series of fits and starts, turf battles, and regulatory skirmishes with no real arbiter.
FIGURE: What Is the Grid Edge?
Source: Greentech Media
Assessing the grid edge landscape, the report identifies critical trends shaping the market in the coming decade, including:
- Lower-cost solar integration. Solar PV integration will become more effective and cost-efficient as inverters become cheaper, more intelligent, and more grid-interactive.
- Smarter demand response. The benefits of OpenADR 2.0 will be a key input not only for demand response, but for many grid edge players as well. This new version of the DR standard allows faster implementation of new DR applications, as it includes a dedicated testing procedure as well as reporting capabilities, producing results in a “language” all stakeholders understand.
- More high-class sensors. Challenges to voltage and power stability in the distribution grid create a strong need for increased visibility of waveform propagation. This need for “sensorization” will not only require more of the same simple voltage and current sensors, but will also speed the adoption of synchrophasors capable of capturing fast-transient processes.
- Clouds gain clout in the analytics market. Several cloud-based analytics platforms have entered the market in 2013, holding an enticing promise. Cloud computing reduces the need for local server infrastructure and thus makes the implementation of analytics a lot simpler.
- Energy storage is reconceptualized. Instead of general cost considerations, the value of specific applications is now discussed in a regulatory context, especially frequency regulation. Regarding storage at the grid edge, this process could pave the way for market architectures that can help to kick-start the energy storage market.
- Smart thermostats, smarter sales strategies. Smart thermostats remain the most successful solutions in the home energy management space, but sustained growth will depend on smart product packages, such as smart thermostats and PV systems.
- AMI deployments require holistic implementation strategies. Advanced metering infrastructure faces tough times ahead. Proving the AMI business case will depend on the joint implementation of communication infrastructures and analytics, to allow immediate visibility of smart metering benefits. As GTM has predicted for many years, AMI infrastructure has to evolve as a foundation for additional grid services to ultimately provide utility value.
- The evolution of microgrids depends on the overall speed of grid modernization. Microgrid applications are at the crossroads of military and civilian applications, driven by public focus on disaster resiliency. Commercial deployments remain scarce, and further projects will require microgrids to become legal entities with clearly predictable value streams.
The free 70-page report defines the grid edge market and outlines its immediate and long-term opportunities and challenges. The Grid Edge Executive Council is an exclusive group of decision-makers meeting regularly to educate each other on critical technologies and market developments and share ideas on how best to move the market forward as a community. Through the council, members can access research on market trends, learn about technological developments, and engage with peers to tackle the electric grid’s most pressing challenges. Founding members of the Grid Edge Executive Council include Pacific Gas & Electric, San Diego Gas & Electric, SMUD, IBM, GE Energy, Newport Consulting Group, Intel, AT&T, SAS, and others.
To download the free report or learn more about the Grid Edge Executive Council, please visit http://www.greentechmedia.com/gridedge.