When electricity customers become a distributed energy resource

August 19, 2015

New technologies are turning electricity customers into a distributed energy resource and that is changing how we view the electricity grid.

While some view the growth of distributed generation as a threat to electric utilities others see an opportunity.

It is true that new technologies that promote conservation and efficiency and distributed generation are challenging the financial sustainability of electric distribution utilities.  Less electricity sold means less revenue to maintain the system.  This is occurring across North America as opportunities to go “off grid”, or substantially reduce consumption, are increasing.

The traditional role of an electric distribution utility has been to sell electricity to an end user – electrons flow one way.  It was all very simple.

A recent whitepaper by SolarCity presents a different way of looking at the grid.  Rather than seeing it as a linear and unidirectional system, they envision the grid as highly interconnected system where data and electrons flow in many directions – that is a smart grid.  And they take this idea one step further.  Customers are seen as a potential distributed energy resource – one that can offer a cost-effective alternative to investing in traditional infrastructure.

SolarCity is proposing “Distribution Loading Order“policies for California to drive the necessary system changes in how interconnections, planning, procurement and data sharing are done to support this vision and to encourage the procurement of cost-effective distributed energy resources before investing in traditional infrastructure like wires, poles and transformers.  In this way, they propose to breakdown the wall between local power generation and regional energy infrastructure planning – something that leading municipalities in Ontario have been calling for.