Grid-edge flexibility introduces benefits for utilities and their customers

The world has reshaped the way we generate, manage, and consume energy due to the current climate crisis and subsequent emissions goals. To make a shift from dirty, expensive and centralized energy to cleaner, cheaper, decentralized systems, we need to switch to renewables, powered by smart tech, and encourage change in consumer behavior and needs. 

Existing infrastructure cannot support change alone

To support this shake up of energy supply, we need grid infrastructure to enable this energy transformation. Yet grids face several interconnected challenges: the need to build out networks, replace aging assets, as well as monitor and manage increasingly complex supply and demand. At the same time, grid operators must continue to connect new renewable assets, and crucially, integrate complementary distributed energy resources (DERs) needed to ensure that intermittent supply can meet evolving demand. Rising to the challenge promises lower costs, cleaner energy and happier consumers, while the cost of falling short – managing ever more complex demand and consumer expectations with aging assets – will be incredibly steep.

Legacy grid tech and regulation remain major obstacles to integrating vital DERs. Regulations such as FERC's Order 2222 aim to help DERs join wholesale power markets more easily, yet compliance remains inconsistent, and some operators may not fully integrate until 2029. To build beyond current needs, systems must be built to support and anticipate future usage. Adopting integrated and agile platforms allows utilities to seamlessly monitor, manage, control, dispatch, and optimize assets, which will become increasingly critical as needs evolve.

Consumers are leading the charge

While connecting grid-scale DERs remains important, consumers find themselves at the heart of the energy transition, increasingly. As they adopt electric vehicles, batteries and other low-carbon tech, consumers are driving unprecedented change. DER proliferation poses significant grid-balancing challenges, and yet it offers the means to overcome those very same challenges. If this tech is integrated properly, utilities can meet evolving consumer expectations, while using consumer DERs to play a huge part in balancing a greener system, alleviating pressure on the grid, especially during peak hours.

Today, for example, energy companies in the UK successfully reward customers for flexible, grid-friendly energy usage via vehicle-to-grid technology and flexible smart tariffs. Likewise, initiatives like the California Energy Commission grant — which aims to enhance energy management and support the transition to electric school buses to use for vehicle to grid purposes —show that consumers have an active part to play in the energy transition.

Digitalization enables transformation

To achieve a true energy transition, we need smart grid optimization, asset management, and intelligent demand response. Next-generation energy operating systems are set to be revolutionary, supporting utilities through such a transformation by integrating and  optimizing DERs, as well as managing the necessary customer relations and smart meter roll out needed to support such a transformation, while factoring in wholesale prices, network congestion, and weather conditions. By embracing digitalization, utility companies can improve their operations, enhance customer experience, and drive innovation across the energy sector.

Next generation operating systems, and the DERs they support, thrive off data. Smart meters, sensors, and other IoT devices can provide much of this data in real- time, helping to predict and prevent power outages, improve energy distribution, and assist in incorporating renewable energy sources. A strong data foundation ensures effective communication between customer devices and grid components, enabling optimization while simultaneously reducing overall costs. Using good data to deliver products and services will help both utilities and customers make the most of DERs, and demonstrates how utilities can use information, technology, and customer understanding to create a better future for all.