TRANSFORMATION
POWER PRODUCED AT OR CLOSE TO WHERE IT IS NEEDED IS TRANSFORMING RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS INTO PROSUMERS.
Residential, commercial and industrial customers are choosing to become prosumers (producer- consumers) by installing distributed generation systems, and in turn are becoming active, rather than passive, participants on the grid. Distributed generation is not new; indeed, industrial customers have used combined heat and power solutions for nearly a century, with much of the growth enabled over the last few decades by advancements in gas turbine technology. However, with the recent declines in solar and energy storage costs, more commercial and residential customers are installing power generation assets within their premises.
This is driven in part by a desire to be more efficient. In some instances, producing power at the point of use is more economic than paying the increasing retail price of electricity. In yet others, customers are looking for generation assets that will enhance their resiliency to grid outages by being able to produce,
Challenges
Traditional utility business models stressed as more customers self-generate Ensuring reliable power delivery with
“two-way” power flows
Incorporating more resources that are variable and uncertain in nature
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and thus consume, power even if the larger system experiences a failure. As distributed generation increases, electric utilities, and in particular those with distribution systems, are faced with numerous challenges. They must continue to ensure reliable power delivery to all customers while being able to address changing power flows caused by distributed generation and lower revenues from customers that are self-generating. Those distributed generation sources that are more variable and uncertain in nature can create more volatility in the system by creating voltage fluctuations outside the prescribed levels. Even as utilities must address these challenges, they also are seeking to harness the power of distributed generation. Placing generation assets closer to their customers allows utilities to forgo expensive system upgrades for peak capacity, provide greater reliability during weather events, and increase system sustainability while also ensuring that customers receive cost-effective power, particularly during peak periods. As electricity consumers become producers, and more entities begin installing and operating distributed generation, one thing is clear: the traditional way of operating the grid will need to change.
Opportunities
Provide electricity consumers with more sustainable and cost-effective electricity
Enhance system reliability by islanding during grid outages
Ensure more efficient distribution system design and upgrades
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