The time-honored discounted cash flow method for determining appropriate utility returns falls short when interest rates are low. Inadequate ROEs ultimately increase cost of capital and wipe away...
The Top 10 Utility Tech Challenges
Innovation must play a key role in each company.
The concept of the microgrid merits additional consideration. A microgrid can be designed to continue to operate when dropped from the power-delivery system as a self-sufficient entity. As a “dispatchable island” in the overall power-delivery system, microgrids can be used to reduce the capacity rating required by some transmission facilities.
A microgrid can play this role only if it includes some form of small generation and storage sources within it. Such distributed energy resources (DER) promise benefits for both microgrids and the broader power-delivery system—benefits that unfortunately have not yet been realized in significant levels. The reason is that much work remains to be done to make DER a widespread reality. A major challenge is to develop interconnection standards and requirements related to integrating DER with existing power-delivery systems, and new sources such as wind energy and photovoltaic devices. The effects of DER on system performance, especially at high penetration rates, can be determined through real-world testing and demonstration projects. Careful studies also may reveal how market structures can provide more meaningful price signals that realize the full potential value of DER.
Advances in storage technologies dramatically will improve the utilization of DER. Fast-response energy storage devices could be used with power electronics-based controllers to provide ride-through capability for transients and brief outages, as well as providing lower-cost solutions to specific types of transmission bottlenecks. One promising storage technology is superconducting magnetic energy storage (SMES), which is available commercially on a limited basis in small sizes. These devices respond to disturbances in less than one alternating current (AC) cycle and provide ride-through capability for multi-second outages affecting sensitive consumer uses. Advanced batteries, flywheels, and ultra-capacitors also are potentially significant storage options for transmission and distribution applications.
Challenge 4 Enable Consumer Portals
The ultimate beneficiaries of high levels of power reliability and power quality are, of course, consumers. But in this age of rapid technological advance, consumer expectations are very high. They want more than just reliable power; studies show that consumers are interested in installing and optimally operating distributed-energy resources, investigating ways to reduce energy costs, and gaining other energy related capabilities. Other services that would benefit consumers include remote monitoring of homes, monitoring of indoor air quality, and diagnosing and performing maintenance on various home appliances. While each of these services can be performed by separate capabilities and service providers, an innovative consumer portal can be the central integrating piece of technology that enables all of these services (and many others).
A consumer portal is a combination of hardware and software that enables two-way communication between energy service organizations and the consumers’ facilities, including equipment within the consumers’ premises. A portal can facilitate consumer participation in demand-response programs, enable automatic meter reading, and broaden consumer interaction with the energy supplier in areas such as billing, reviewing energy consumption, reporting trouble, and selecting a service provider. More motivated consumers could optimize their energy use by downloading price forecasts, computing energy efficiency of appliances, controlling distributed energy resources at multiple sites, and submitting bids to an energy market. On the other side of