ENERGY CONSUMER DEMAND FOR DISTRIBUTED-ENERGY RESOURCES (DER) is growing
for a number of reasons—unexpected utility power outages, planned rolling blackouts, power quality
problems, increases in power costs, etc.
Customers have always wanted reliable, high-quality, reasonably priced power. Until recently, though, they had to cross
their fingers that their local utilities would provide all of these.
Now, with the increasing availability and cost-effectiveness of
DER, more customers—industrial, commercial, governmental
and residential alike—are taking power generation and even
storage into their own hands.
DER can include natural gas (used in generators, turbines
and microturbines); hydrogen (used in fuel cells); and combined heat and power (known as CHP, which uses waste heat
from the generation to provide on-site heat).
However, other DER technologies are of particular interest to electrical contractors (ECs): renewable-generation
sources, such as solar and wind; large-scale battery storage;
and microgrids, which are often some combination of natural
gas, hydrogen, CHP, solar, wind and battery storage.
In the past, the only people who could design, install and
maintain power generation for customers were the engineers
and electricians who worked for utilities. Now, with the growing popularity of DER generation and storage, ECs have the
opportunity to help customers of all sizes and types design,
install and maintain DER generation and storage resources.
At the Grid Edge Live 2015 conference, Steve McBee, presi-
Advances in distributed generation
dent and CEO of NRG Home, a division of Philadelphia-based
utility NRG, said, “The fundamental takeaway is the extent to
which technology has destroyed long-standing, centralized,
provider-driven service models and replaced them with decen-
tralized, demand-driven service models that have empowered
customers in ways that are totally unprecedented.”
How large is the opportunity? A December 2014 report,
“Global Distributed Generation Deployment Forecast,” published
by Navigant Research, stated that the global market for distributed
generation is expanding rapidly. While distributed generation was
providing 87,300 megawatts (MW) of power per year in 2014,
Navigant projects that to grow to 165,500 MW by 2023.
Besides advances in DER technology and more attractive costs,
growth is also fueled by policy changes made by state utility
regulators. For example, California’s three investor-owned utilities were required to file detailed DER plans by July 1, 2015.
Part of the state’s mandate would allow aggregators of distributed generation the opportunity to sell into the independent
system operator (ISO) electricity marketplace, which was the
first time this was allowed in the United States.
In addition, the results of a new survey of 500 energy industry representatives (utility executives, regulators, distributed
energy providers, etc.), conducted by GTM Squared, a research
arm of Greentech Media, suggest that ongoing regulatory proceedings designed to properly value DER will be critical in
helping it gain traction. As industry stakeholders focus efforts
on regulation and valuation of DER, growth is expected to continue, paving the way for ECs to expand their work in this area.
A recent Navigant Research report, “Direct Current Distribution Networks,” examined the opportunity for direct current
(DC) distribution networks, such as microgrids, in four key
market segments—off-grid/bad grid telecommunications,
data centers, commercial building grids and off-grid military
applications. Each revolves around different market assumptions, dynamics and drivers. While large, centralized power
plants are expected to continue playing a role in providing
alternating current (AC) power to the wholesale macrogrid
(the nation’s interconnected electric transmission grid), there
is, according to Navigant, increasing momentum at the electric service distribution level to diversify power offerings and
pursue solutions incorporating a growing proportion of DC
power. Navigant expects that global DC distribution network
implementation revenue will grow from $2.8 billion in 2015
to $5.1 billion in 2024.
> FOCUS BY WILLIAM ATKINSON