Assessing the risks and rewards of distributed energy strategies.
Hugo van Nispen is executive vice president, energy advisory, at DNV GL – Energy.
There’s an understandable feeling among utility executives that the longstanding regulatory compact under which they’ve operated is at significant risk. For years, the deal seemed straightforward: you invested in necessary infrastructure, you operated cost-effectively and reliably, and your investment yielded reasonable rates of return. Today, the regulatory and political situation for electric power has become increasingly volatile.
Facing the seemingly imminent arrival of large-scale distributed energy resources (DER), utilities are concerned. Regulatory rulings that support consumers bypassing the electric system, but remaining connected to it at no charge for failsafe back up, pose profound economic and regulatory consequences. Potentially disruptive innovation is underway in the global utility market in distributed energy resources, including energy storage, distributed PV, microgrids, demand response, efficiency, and load management, among others.