Electric Utility Decentralization is Nothing to Fear
Electric utility decentralization is coming whether we like it or not. Microgrids and other forms of distributed energy resources (DERs) are already growing in prominence and are predicted to exceed 500 GW of capacity in less than 10 years. Most utility executives I know are concerned about this trend, but I’m here to tell you that there is nothing to fear.
Electric Utility Decentralization Could Enhance Reliability
The main reason that electric utility decentralization is generally seen as an industry risk relates to a loss of control. Utility companies in all sectors, especially electric utilities, are scrutinized by customers and regulators to maximize system reliability, and DERs are commonly viewed as something that will reduce their propensity to optimize system uptime.
This makes sense, because it’s not easy being held accountable for something over which you have a decreasing level of control. This fear is even more pronounced when you realize that DER operators are not subject to the same level of scrutiny as traditional utilities.
But an analysis of the NYC food supply chain indicates that decentralized operations may actually enhance reliability. The city’s food chain delivers a whopping 19 billion pounds of food to residents and visitors each and every year. And the city’s food supply approach has been working effectively for nearly a century.
The NYC food chain provides the conceptual model, but for electric utilities, some changes will need to be made to operationalize this approach. New technologies, systems, processes and regulatory mandates will be required. In fact, these changes are already being mapped out, anchored by the Energy Web Decentralized Operating System (EW-DOS). The EW-DOS paves the way for the transition to a decentralized approach, and I think it will work.
The bottom line is that DERs are not going away and in fact will increase going forward, so electric utilities need to incorporate this change into their line of thinking. Electric utility decentralization is not only necessary, but based on the model laid out by the EW-DOS, should actually improve reliability. In other words, this transition is not to be feared – rather, it needs to be embraced!
