Solar PV and batteries will be part of the grid of the future. But what part? And what sort of grid?
The answers are as yet uncertain, writes author Leia Guccione in a July 1 blog for Colorado-based Rocky Mountain Institute, but that organization, known for decades of innovative thought on the world’s energy systems, has been looking for answers.
In its most recent report on The Economics of Load Defection, RMI sought to establish when, where, and how distributed solar-plus-battery energy storage would challenge the traditional utility business model.
One possibility is load defection from the grid, a suboptimal outcome for customers and utilities alike, RMI believes. “However,” as Guccione observes in her blog, “we might be making choices today that will lead the electricity system in that direction. Conversely, other decisions will make it easier for customers to integrate these distributed energy resources into the grid.”
RMI sees not a binary choice, but a spectrum of choices, from full grid service to full grid independence.
“Customer interests and grid interests do not need to be at odds with one another,” she continues, “but in most of the U.S. today, they are. Utilities are regulated to earn more by building more, and customers are incentivized to reduce their costs. Unaddressed, this dichotomy will only worsen: utilities will continue to find ways to invest in new infrastructure, and customers will continue to find new, increasingly technology-enabled ways to reduce costs.
The issue is being forced by rapidly declining costs for solar PV and battery storage, Guccione adds. “In some contexts,” she says, “solar PV and batteries can lower system-wide costs, contributing to the provision of reliable, resilient, flexible, low-carbon electricity supplies and enhanced customer choice. [The best path] allows for pricing structures, business models, and regulatory environments designed to integrate distributed energy resources such as solar PV and batteries, and their inherent costs and benefits, into the functioning of the grid.”
Since 2013 RMI has been offering a service it calls the Electricity Innovation Lab (eLab), to bring together “thought leaders and decision makers from across the U.S. electricity sector to address critical institutional, regulatory, business, economic, and technical barriers to the economic deployment of distributed resources.
“eLab works to answer three key questions:
• How can we understand and effectively communicate the costs and benefits of distributed resources as part of the electricity system and create greater grid flexibility?
• How can we harmonize regulatory frameworks, pricing structures, and business models of utilities and distributed resource developers for greatest benefit to customers and society as a whole?
• How can we accelerate the pace of economic distributed resource adoption?
See http://elablandscape.rmi.org/ for examples of projects.
Ms. Guccione’s original blog post is at http://blog.rmi.org/blog_2015_07_01_the_grid_is_at_a_fork_in_the_road.
Visit www.rmi.org/electricity_load_defection for the RMI’s report on load defection.