Utilities Warn of Rising Pressure on Electricity Reliability and Prices, Accenture Reports
Almost half (45 percent) of utilities industry executives surveyed by Accenture worldwide, and 64 percent in Europe, reported that the traditional electricity distribution model is no longer “fit for purpose.” Unless the industry undergoes a digital, regulatory and business model transformation, utilities warn of increasing pressure on supply reliability and prices, according to Accenture’s “Digitally Enabled Grid” research, now in its third edition.
The proliferation of distributed generation has been a key challenge for utilities. Accenture’s survey of 85 industry executives across 18 countries found that more than half (56 percent) expect grid faults to increase by 2020 as a result of distributed renewable generation such as residential solar photovoltaics (PV). In addition, improving economics could make electricity storage another key disruptor, with 32 percent of executives expecting it to cause an increase in grid faults, up from 14 percent in 2013.
“As consumers invest in residential storage and are able to use stored electricity instead of purchasing it from the grid at times of peak demand and price, distribution businesses will face a decrease in demand and consumption on their network. This will impact the utilization of grid resources, putting revenues at risk,” said Stephanie Jamison, global managing director, Accenture Smart Grid Services. “However, we see utilities learning from their experience with PV, where they faced rapid growth in residential deployment without sufficient means to manage the effective integration of the new supply, and lagged in developing complementary services, like installation, maintenance and dispatch optimization, leaving the doors open to new competition. Utilities recognize that PV plus storage represents an existential threat to their businesses if they don’t get into the game early.”
While storage promises to quickly become a new battleground, with 66 percent of executives expecting competition in this area to rise in the next five years-up from 48 percent in 2013-utilities executives are not standing by. As many as 77 percent are already investing or plan to invest in storage in the next 10 years.
In addition, investing in storage solutions could create new revenue opportunities for utilities, with almost half (47 percent) of the executives surveyed expecting moderate or significant revenue upside from these investments by 2030. In fact, in the next five years, almost half (49 percent) expect to be offering network-level storage services, and 30 percent are likely to be offering customer residential storage services, such as maintenance.
To reap storage deployment benefits, utilities must transform the role of their distribution business. Yet most utilities are still at an early stage of this journey, with only 15 percent of utilities executives worldwide, and 29 percent in Europe, saying this transformation is already underway.
The current regulatory approach is the main roadblock, so tighter collaboration with policymakers is needed to enable this transformation. For example, executives believe that the top three regulatory changes required include new tariff and pricing models (84 percent), a greater role for distribution businesses in permitting and authorizing distributed energy resources connections (66 percent), and incentives for the deployment of innovative technologies on the network (64 percent) to develop a digitally enabled grid.
“We expect a fundamental shift of the market structure, which will include greater use of competitive markets, but utilities and distribution businesses need to push the boundaries, collaborate with regulators to innovate, and strategically invest in solutions that will support a more digital and distributed grid, providing new choices and value streams for customers,” concluded Jamison.
Accenture’s annual “Digitally Enabled Grid” research evaluates the implications and opportunities of an increasingly digital grid. The 2016 research included interviews with 85 utility executives across 18 countries between September 2015 and January 2016. The executives interviewed were those involved in the decision-making process for smart grid-related matters, with 65 percent representing integrated utilities and 35 percent standalone. The countries represented included Australia, Belgium, Canada, China (and Hong Kong), Denmark, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, South Africa, Spain, Thailand, the United Arab Emirates, the United Kingdom and the U.S.
Hartford, Constellation and Bloom Energy Start Construction on Fuel Cell-Powered Microgrid
Constellation, Bloom Energy and Hartford, Connecticut are constructing a microgrid system powered by fuel cells that will help manage electricity costs and supply emergency power to a portion of the city’s Parkville neighborhood.
During non-emergency operation, the 800-kW microgrid system is designed to provide 100 percent of the electricity for Parkville Elementary School, Dwight Branch Library, Parkville Senior Center and Charter Oak Health Center. In the event of an electrical grid outage, the system will provide emergency power to these locations in addition to a local fuel station and grocery store. Excess electricity generated by the system will reduce power costs at four local schools: Bulkeley High School, Hartford High School, Weaver High School and the Sport and Medical Sciences Academy.
“When the power goes out elsewhere, our state-of-the-art microgrid will keep the power running at a senior center, library branch, school, health center, supermarket and gas station,” said Hartford Mayor Luke Bronin. “In addition, the clean energy produced by the fuel cells will result in cost savings for the city of Hartford. That’s a win-win for our city-and we hope to build on this model elsewhere in Hartford.”
Constellation, a subsidiary of Exelon Corp., is providing engineering, procurement, construction and operation services for the microgrid system. Powered by Bloom Energy fuel cells, the electricity generated will be purchased by the city at or below current market rates through a 15-year power purchase agreement.
“As a competitive energy supplier and a strong advocate of customer choice and innovation, Constellation aims to provide flexibility and support for our customers who require distributed generation and other dedicated energy technologies as part of their overall energy strategy,” said Gary Fromer, senior vice president of distributed energy at Constellation. “We applaud the city of Hartford for its commitment to microgrid development and the state of Connecticut for creating the public-private initiatives that help make projects like this possible.”
“Bloom Energy is proud to be a part of this innovative public-private partnership with Constellation and the city of Hartford,” said Josh Richman, vice president global business development & policy at Bloom. “This microgrid project and others like it would not be possible without the state of Connecticut’s support.”
The project is Connecticut’s first to be developed thorough a public-private effort and one of the first implemented through Connecticut’s Department of Energy & Environmental Protection (DEEP) Microgrid Grant Program. In addition, the project is part of the state’s Low-Emission Renewable Energy Credits Program, which enables participants to sell qualified Connecticut Class I renewable energy credits (RECs) created from renewable projects to the local utility under a long-term contract.
“The Parkville microgrid is a perfect example of the positive impact we can have on our communities and residents through innovative and creative approaches to the energy challenges we face,” said Commissioner Robert Klee, Connecticut Department of Energy and Environmental Protection. “This microgrid will help reduce energy costs for the city of Hartford and its school system, in addition to providing power to maintain important services for people when the electric grid goes down. We are pleased that DEEP’s microgrid grant program and other energy initiatives helped make this impressive project possible.”
GI Energy initially worked with the city of Hartford to develop the project and submit the project for consideration to the state’s microgrid program.
The microgrid system is scheduled for completion during the third quarter of 2016.
Demand Response Tools Deployed by New Hampshire Electric Cooperative
By Rod Walton, Senior Editor
New Hampshire Electric Cooperative (NHEC) is launching three new residential and small and medium-sized business demand response (DR) programs to offset peak energy usage and save on future generation costs.
NHEC, which serves about 80,000 customers in 115 communities, is offering customers those three programs using AutoGrid’s cloud-based demand response optimization and management system (DROMS) solution. Those DR offerings include behavioral demand response, time of use/critical peak pricing and direct load control components.
The three “Go Beyond the Peak!” programs allow customers who volunteer for the program to shift energy consumption to periods when the utility’s demand and other electricity charges are low, thus helping NHEC reduce its overall power and delivery costs. NHEC’s “Peak Days” behavioral demand response program notifies members when a DR event will occur, encouraging them to lower their energy use at that time. As part of the “Peak Planner” time of use/critical peak pricing program they agree to reduce their energy use during DR events, securing lower electricity charges and bill credits in return.
Finally, the “Peak Plus”direct load control program connects directly to members’ Internet-connected water heaters, space heaters and window air conditioners, lowering the power used by those products during a DR event. For now, the program only connects to those three pieces of equipment.
“For NHEC, the member experience was the most important consideration for us as we designed and rolled out our demand response programs,” said Heather Manypenny, power resources executive at NHEC, in the press release. “The flexibility offered by AutoGrid DROMS is enabling us to manage a wide range of behavioral and automated programs across all our member classes and allows us to offer the right programs to our members not only today, but well into the future.”
Members can enroll in, monitor and manage their participation in DR programs and events using NHEC’s online consumer portal interface.
EYE ON the world
Omexom Awarded £15 Million Overhead Line Contract in Scotland
|Andy Young, Alastair Dawson and Simon Innis of Omexom.|
Australian electricity services provider Omexom has been awarded an overhead line contract worth £15 million ($16.9M U.S.) by Scottish and Southern Energy Power Distribution (SSEPD).
The contract is designed to enhance the resilience of the electricity network and will cover all aspects of overhead line construction including new build and refurbishment. It will facilitate the connection of renewable energy schemes such as wind farms, hydro, photovoltaic and bio mass.
Managed and delivered from Omexom’s office at Dunning, near Perth, the contract will cover the highlands and islands regions and will employ a workforce of up to 40.
“We are very pleased to have been awarded this three-year overhead line contract with SSEPD, a longstanding customer with whom Omexom has worked since 2006,” Andy Young, business unit general manager for Omexom UK Distribution Overhead Lines, said in a statement.
The work will involve the replacement of old low-voltage conductors, wooden poles, support stays and steel works which help to improve the quality of the network, he added.
“We will also replace the old 11 kV and 33 kV conductors with modern aluminium and copper conductors allowing for a much greater network capacity for customers,” Young said. “In addition, we will build new sections of overhead lines which allow for network expansion and the connections of wind farm or hydroelectric schemes in order to export electricity to the grid.”
Under parent company VINCI Energies, Omexom is responsible for the design, supply and construction of electrical infrastructure solutions throughout Great Britain and Ireland.
Omexom UK and RoI’s offices are located in Perth, Ardee, Belfast, Durham, Manchester and Rugby.
Kenya Public Schools Wiring up with Schneider Electric’s Help
As part of the school electrification program of the Kenyan Rural Electrification Authority, Schneider Electric developed an off-grid solar power solution customized to primary schools’ needs.
Schneider Electric, a global specialist in energy management and automation, and the Rural Electrification Authority of Kenya electrified 128 rural schools throughout Kenya in 2015. This represents more than 45,000 primary schools pupils that now have access to energy for their education needs.
“At Schneider Electric, we believe access to reliable energy is a basic human right, and education is important for nation building and facilitation towards education and development,” said Kamal Gupta, head of renewable energy-solar at Schneider Electric (Kenya). “Schneider Electric has a strong relationship with the government of Kenya and was chosen as a technical partner to electrify 128 schools in 2015. We are exploring solutions for health centers and sharing our experience worldwide.”
Lack of electricity in Africa remains one of the biggest barriers to the region’s development and prosperity, and continues to trap millions of people in extreme poverty. With a third of all primary schools lacking any access to electricity, that means that 90 million students are left being educated from places that have no power.
In Kenya, where 77 percent of the 44 million inhabitants have no access to electricity, the government entrusted the Rural Electrification Authority with the responsibility of ensuring that all public primary schools in the country are connected to electricity supply in readiness for the implementation of a global laptop program. In 2015, Schneider Electric has been selected as technical partner to electrify 128 schools.
Schneider Electric Kenya designed a high featured off-grid PV solution. This solution comprises two PV inverters with solar charge controller. The first PV inverter is dedicated to supply energy for lighting application and the second PV inverter is for computers. These two PV inverters are supported by Deep Cycle Solar GEL batteries and Solar PV modules. Schneider Electric trains local entrepreneurs to install the solution and someone from each school to maintain the system and regulate its usage.
The solution developed by Schneider Electric for this project is replicable and customizable for any similar electrification project in Africa, the company said.