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Opportunities and Challenges Offered by Grid Modernization

The availability of distributed energy resources (DERs), which include power generation through renewable sources like solar and wind as well as battery storage, is changing the way we envision the future of our power infrastructure - and it’s about time! The current system, massively expanded but little changed since its inception in the late 1800’s, is due for a major overhaul. Enabled by new clean energy technology, distributed generation is the clear path to a modernized, stable, effective grid.

What ripple effects might this change create? Let’s take a look at some of the opportunities and challenges offered by grid modernization:

Challenges for Energy Sector Innovators

In a recent article released by the Forbes Technology Council, Joe Forbes examines “Three Consequences of the Transition Taking Place in the Electric Sector.” “What is taking place is much more fundamental than just technological substitution,” he writes. “The entire character of the electric grid is changing, from centralized, large-scale generation to a proliferation of smaller-scale, distributed energy resources that are cheaper, more efficient and much faster to deploy.”

While this is encouraging (and long overdue) forward movement, it is also a monumental shift that will have far-reaching impacts. As innovators in the energy space, what challenges should we be preparing for?

Forbes highlights the management of data as one of these issues. “This energy transition has created exponential growth in data and complexity, which, if left unresolved, will stymy the growth of renewables and distributed resources and keep the electric grid stuck in the 20th century.” Distributed energy technology (including energy collection and storage) has progressed at a rapid pace, but the data management platform needed to incorporate these resources into the grid is lagging. Big Data deployment and security has been a tripping point for banking and financial services companies; the energy sector needs to be prepared to do better.

Another consequence of the shift to distributed energy resources is one that excites those of us in the alternative energy space: the opening of a massive new market. Forbes notes that “The demand for electricity is expected to double by 2060.” Since this new demand will increasingly be met by renewable, decentralized sources of power, we must be prepared to wrestle with regulators and encourage this shift from the utility monopoly to a fair distribution of resources, incentives, and benefits. This new market doesn’t guarantee success - it provides an opportunity to continue proving that distributed energy solutions are what the market needs.

Finally, Forbes explores the increased complexity of financial transactions created by the distributed generation paradigm. Just as the explosion of data provides a challenge for record-keeping and security, grid-edge energy resources create a need for a faster, more comprehensive platform for financial transactions. Noting that “The energy solutions that we will take for granted in the future may remain as fairy tales in white papers and pilot projects if they cannot receive the proper compensation for the valuable grid services they provide,” Forbes suggests that a new platform for these transactions is vital to the successful implementation of grid modernization efforts.

Enabling a Future of Distributed Generation

These challenges aren’t a reason to back down from progress. After all, distributed generation by way of sustainable energy sources provides more efficient and effective power to our communities and mitigates our negative impact on the environment. Instead, they are a call to innovators in the energy and technology sectors to stay ahead of the curve and continue providing vital solutions to the energy problems that we are facing today and in the future.

Grid Modernization has had a disappointingly slow start in the United States, but thanks to the efforts of states like California and New York, the foundation for a better energy future is being built today. If the renewable energy community continues to rise to the challenge, progress is inevitable. Consumers can play their part in encouraging the shift towards distributed generation by voting with their wallets and supporting renewable resources. And perhaps even utility companies will come to see that this progress provides opportunities for them as well, as Darrell Proctor writes for Power Magazine.

Solar Design Studio is doing our part to enable a future in which renewable, distributed resources replace our outdated, inefficient energy infrastructure by educating consumers and working with them to deliver the greatest possible value for their solar projects. To learn more, contact us today!

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