Renewable Energy

Distributed Energy Resources: The Power Source That Benefits Everyone

The old utility power grid is rapidly changing and diversifying. We now have new sources of energy generation.

Solar and wind are the dominant new sources of energy. In the Midwest, where the wind blows almost all the time, large wind turbine farms dot prairies and farm fields.

Residential, commercial and utility-scale solar are now not only affordable but also reliable. And residential solar is increasingly being paired with battery storage.

This is giving many customers their own microgrids. And that can keep them safe from utility blackouts.

Sometimes during the day, customers’ solar panels produce excess energy. Their systems end up dumping it back onto the utility grid.

From the utilities’ perspective, this looks like another source of electricity. In utility speak, this is an example of a distributed energy resource (DER).

Nonpolluting and Reliable

A DER can be something as simple as a smart thermostat. And in the near future, electric vehicles, with their giant batteries, will act as these energy resources.

Other examples of these include rooftop- and ground-mounted solar systems, wind turbines, microturbines, fuel cells, and biomass generators.

Utilities are starting to realize these resources aren’t a competitive nuisance. They are, in fact, a valuable asset.

In essence, every homeowner with solar power paired with battery storage and/or an EV becomes a small generating station. And when under software control, separate distributed energy resources work together as a virtual power plant. There’s no pollution involved.

The entire system is inherently more reliable because this “power plant” is made up of many small generating sources.

And the probability that they would all fail at the same time is nearly zero. So it’s no surprise that utilities are starting to embrace DERs. Using them as virtual power plants (and paying owners for their use) is an effective cost avoidance tool for utilities.

The real future for utilities is focusing on technology that effectively manages distributed energy resource growth.

Spending money on control software is far less expensive than building a new power plant. And by using these resources, utilities can avoid other infrastructure, like transmission lines and substations.

The key is to provide incentives for utilities to actively use and promote DERs. Additionally, utilities must fairly compensate owners for building them.

Thinking of these resources as grid assets is a complete mindset shift for utilities. Today, when power demand reaches peak levels, utilities generally start up natural gas-fired peaker plants.

They take several hours to come online. So utilities start them long before they actually need them. This wastes millions of dollars in resources and energy. And the whole process is polluting and inefficient.

In contrast, utilities can summon distributed energy resources in fractions of a second.

Everybody Wins

Rapid adoption of DERs could soon be underway. Public utility commissions are starting to review and adopt policies that reward utilities for using them.

Control software is still in its infancy but is progressing rapidly. And solar installers need to educate customers regarding the economic benefits of owning distributed energy resources.

With DERs, everybody wins. Utilities have better control over their grids, and grid reliability improves.

Customers have cheaper electricity, and they are paid handsomely for selling extra power to the utility.

What’s not to like about that?

Good investing,


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