Smart energy names the techniques and technologies needed to manage energy flows and energy supply and demand when energy generation and energy storage are as distributed as energy consumption is today. During the early years of distributed energy, distributed energy resources were so small as to be losable in the noise of the grid. Installations were treated by utilities as if they were just another utility installation. This design approach has become the single largest barrier to distributed energy. So when are we going to get smart about distributed energy?
Grid assets are managed by central control. This only works so long as the assets are central and the assets are centrally owned. Distributed assets should have distributed ownership. Their purpose is often local, and the local owner has their own reasons for deploying them. As I have written before, today’s integration techniques actually discourage distributed storage. Distributed storage may be the single most critical requirement for smart energy to succeed.
The first generation of PV consultants are so focused on the utility that they do not even know why the consumer is installing the system. Their reports to potential customers emphasize gaining payments from the utilities over obtaining on-site benefits. The reported risks to the customer are regulatory, i.e., will the local commission hold firm in forcing the utility to pay these rates. Even financial matters look to the utility: will utility throttling of generation interfere with PV as an annuity.
When asked about local benefits, of self-sufficiency and of resilience and of local control, few of the first-generation consultants have any answers. They look discomfited for a minute, they go back to reciting interconnect rules. From their actions, one would induce that they see no value to the site at all, merely an opportunity to loot the public weal.
This looking to the utility reduces the value proposition to the customer. The central control model reduces innovation in systems. As many realized after Sandy, forward assets of a central authority are of no use after a crisis. Without central control, they simply turn off.
The answer is to turn this model on its head. Smart energy manages from the edges, not from the center. Smart energy treats homes and commercial buildings as microgrids responsible for their own power. Each of these microgrids is a node within its neighborhood, able and willing to share its excess power as needed. A microgrid that contains generation or storage may even decide to serve those neighborhood needs before those of its constituent nodes. Those decisions, though, must be negotiated using sound market approaches.
If Solar consultants would start acting as if they believe solar energy is a good idea for the customer, and not just a way to extract regulatory rents then solar installations would increase. Until they do so, every installation will take longer, and cost more, than it should. Customers currently in the process find the solar consultants, and their regulatory-centric models, to be the biggest barrier to installations.