Professional Documents
Culture Documents
AHEAD
HOW DISTRIBUTION
UTILITIES CAN GET SMART
WITH DISTRIBUTED
GENERATION
INTRODUCTIO
three-person
sign up for rooftop solar in the next five All this, of course, is not escaping the NORTH AMERICA
years. attention of distribution executives. They Expected revenue
continue to voice considerable concern reduction from
In addition, consumers believe their energy about the impact of rising rates of distributed generation
deployment–likely to
providers should be providing the services distributed generation penetration on their be due to bundling of
and support to fulfill these goals. Nearly six revenues (see Figure 1). distribution and retail
out of 10 consumers expect energy providers revenues
ASIA PACIFIC
FIGURE 1. Distribution generation is expected to cause revenue reduction.
Expected revenue
DISTRIBUTED GENERATION
reduction from
distributed generation
deployment–likely to
(E.G., PV, FUEL CELLS) be due to bundling of
distribution and retail
revenues
61%
ANTICIPATED REVENUE
43%
REDUCTION
13
WHEN DO YOU EXPECT TO
REACH THE HOSTING CAPACITY
28
FOR DISTRIBUTED GENERATION DEPLOYMENT IN
YOUR NETWORK?
WE DO NOT EXPECT TO
54
EVER NEED TO EXCEED
THIS THRESHOLD LEVEL
5
YEARS AND BEYOND
PERFORMANCE MODEL
NEW SKILLS
CHANGES TO HUMAN
CENTRALIZATION
CO-LOCATION
CHANGES
OF TEAMS
While every utility operates in a specific Relying on regulatory constraints to limit the
context that will ultimately determine the deployment of distributed generation into
detailed approach it takes, all have to seek the network may help in the short term to
the appropriate balance between four key avoid some increases in network costs. But
variables: increasing capital investments, the overall direction of travel for consumer
optimizing operations and maintenance choice and policymakers’ goals raises
(O&M) spend, managing regulatory questions about the sustainability of a
constraints on distributed generation regulation-based strategy that seeks to
deployment, and investing in smart prevent new forms of more renewable
solutions. The first two variables come with generation from connecting to the network.
considerable risks and uncertainties that are What’s more, inherent in consumers’
likely to increase in the longer term. economic assessment is an assumption
Increasing investment in capital assets around the ability to export generation back
presents some financial advantages if the to the grid. If consumers are not able to do
basis for remuneration remains linked to this—either due to limited technical capacity
asset value, as opposed to evolving toward or through reduced economic value—the
an output-based model. However, the result will be an acceleration in the
shifting tariff landscape raises questions deployment of storage, causing an even
about the long-term viability of current larger impact on total demand.
funding models. In addition, rising
distributed generation adoption is likely to
require ever-larger investments and
operating sophistication to increase hosting
capacity.
- €16bn
BASE DEPLOYMENT
COSTS TO 2030
LOCATIONAL CURTAILMENT STORAGE OR
139GW of PV and INCENTIVES AND NON-FIRM DEMAND RESPONSE
wind power CONTRACTS
deployed from 2017
to 2030
In addition, steps taken to facilitate the distributed generation toward areas of the
ability of the grid to accommodate new network where it could have the greatest
forms of localized generation could prove positive impact on network reliability. These
foundational for the broader steps utilities could include a faster or cheaper approval
should take to deliver the smarter, digitally process for specific locations, reinforcement
enabled grid at scale. cost charging and sharing benefits with
distributed generation owners.
Locational incentives could provide simple
structures to help improve asset utilization Smarter grid solutions could also enable the
by directing new distributed generation to control and curtailment of distributed
appropriate locations on the network, generation exports to the grid at critical
depending on available capacity and other times. This would facilitate the development
factors such as timing of peak demand. By of new commercial products and greater
making better use of smart meter and flexibility for network operators, with
network sensor data, along with digital asset network monitoring and improved power
management and network modeling forecasting enabling real-time controls. The
capabilities, distribution utilities would be resulting greater control could also enable
able to undertake far more granular analyses the use of demand response to better
to assess and optimize hosting capacity manage grid performance, and encourage
across the network. These same more storage capacity and smart inverters
capabilities—together with the enhanced onto the grid to create new services and
data and understanding of performance they revenue.
provide—would also considerably enhance
overall asset management. Many utility A further benefit is that smarter grid
distribution assets are "fix on fail" today. In solutions offer distribution businesses the
the future, more granular data on asset opportunity to get in front of their customers
performance and on the specific risks from in a new way, creating new value both for
individual asset failure will drive customers and the utility business. A new
improvements in operating costs to deliver relationship could be formed through
network reliability. Using those improved offering a range of distributed generation-
asset management capabilities to drive related services such as payment for
network requirements could help steer curtailment or integrated storage solutions.
FIGURE 6.
Anticipated regulatory changes expected in the next 10 years. EUROPE NORTH AMERICA ASIA PACIFIC
models.
And foundational to that technology is the
harmonization of operational and business
systems and data: IT/OT integration. Yet
despite the acknowledged importance of
IT/OT integration to delivering smart grid
capabilities, most utilities have not yet
moved to large-scale deployment.
40%
At the strategy stage:
24%
At the initial deployment stages:
convergence strategy, business governance, data model
case, roadmap definition, data quality policy,
system architectures and pilots
In Accenture’s IT/OT utility
executives survey,4 HOW WOULD YOU
ASSESS THE MATURITY OF YOUR
CURRENT IT/OT INTEGRATION CAPABILITIES?
AND 44%
Some need for improvement
5%
No need for improvement
say that their IT/OT
integration capabilities have
significant need for
improvement (see Figure 7). 31% 43% 51%
2013 2014 2016
From a customer standpoint, utilities need to generation curtailment and the provision of
invest in forecasting capabilities. Depending ancillary services. These will require
on their regulatory context, utilities should regulatory changes to provide an
focus on providing consumers with new optimization mandate to utilities and realign
distributed generation-related value the distribution business revenue model to
propositions such as PV system design, become output-based. Timing is critical:
locational incentives and financing services. building new capabilities is the long
From a network perspective, forecasting and play—and those utilities who invest ahead of
grid operations will be key to moving toward the curve will be those reaping the benefits
real-time distributed generation of smarter distributed generation integration.
optimization, including distributed
DISTRIBUTED GENERATION
PENETRATION FORECASTING
ADJUST CUSTOMER PROPOSITIONS
ABOUT ACCENTURE
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