An energy system is, in some ways, like a neighborhood. Utilities and other distribution grid operators, DER operators, and end users all affect each other, directly and indirectly. Their differing agendas are, in many ways, complementary. Holistic awareness of an energy neighborhood can yield more robust and mutually beneficial energy systems.
The disruption that new technologies are causing in energy systems can be more effectively managed with cooperation among stakeholders. In particular, the sharp rise in distributed solar energy resources at the grid edge and on customer premises can lead to power quality problems, backfeeding, and challenges such as the famous California “Duck Curve.”
Meanwhile, emerging technologies are creating opportunities to enhance grid capacity and resilience, as well as new business opportunities and economic efficiencies. Key technologies to watch include smart inverters, battery energy storage, and DER management systems. Also, strategies such as orienting solar plants for greater grid compatibility, or power purchase agreements based on time-of-delivery rates, can help solar plants function more harmoniously with utilities and nearby end users.
A holistic perspective can prove especially useful in addressing challenges from the grid-edge solar integration — such as power quality problems, backfeeding, coordinating DERs and centralized generation, and interacting with transmission networks.
Updating incentives is essential to enable an energy system to operate smoothly. Here, energy regulators, independent system operators, and equipment manufacturers can serve as “friends of the energy neighborhood,” by reshaping how stakeholders can interact effectively. This can range from redesigning tariffs to encouraging large-scale demand management programs and more.
By learning to function as good energy neighbors, stakeholders can realize considerable immediate and long-term benefits.