During the DistribuTECH Power Transmission Conference in San Diego at the beginning of February, executives from all across the US utility sector agreed on one point: their industry is changing rapidly, according to a wrap-up of the conference by Greentech Media’s Julia Pyper. With the advent of distributed energy technologies like rooftop solar, it is clear that utility companies are diversifying and bracing for a (potentially disruptive) transition into the digital era.
Ted Craver, president and CEO of Southern California Edison (SCE), believes that changes in the utility sector, while potentially significant, will likely be incremental and more “evolutionary than revolutionary”. He sees positive developments within his own company, which is in the early stages of a long-term project that will bring 2,200 megawatts of distributed resources on-line by 2022. This would include 250 megawatts of energy storage that could set a precedent for incorporating distributed and customer-owned energy assets into the grid.
By 2025, utilities will face an estimated $48 billion in revenue losses due to customer-sited distributed energy technologies, says Greentech Media. Approximately 61 percent of utility executives believe distributed generation will reduce revenues in the next decade, up from 43 percent in 2013. Most executives also anticipate increased competition from power electronics hardware and services, data-related services, demand response and electric-vehicle charging infrastructure.
In light of the projected revenue shortfalls, many utility outfits across the country are in the process of diversifying their operating activities. By offering new services like installing, managing, financing and maintaining solar panels, fuel cells, and microgrids, utility companies are positioning themselves for success in a rapidly changing market while also better serving the needs of their customers. Duke Energy announced during the conference that it is building a microgrid at its Mount Holly, North Carolina, facility to test the integration of various electronic devices.
As digitization and infrastructure upgrades become more common, so will concerns about their costs. Richard Wernsing, a manager at Public Service Electric and Gas Company (PSE&G) in New Jersey, believes utility companies must carefully balance the financial risks with the benefits brought by advanced digital technology. With the proper technical, administrative, and regulatory groundwork in place, Wernsing believes the changes within the industry will pose major opportunities.
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