The urgent need by utilities to meet growing demand and balance ratepayer affordability is forcing a more collaborative approach to customer-sited generation resources and grid flexibility solutions, experts said during a June 29 briefing hosted by Advanced Energy United Inc.
"To keep up with projected load growth, states urgently need to build more large-scale energy generation and transmission resources at the lowest possible cost," said Shawn Kelly, managing director of Advanced Energy United, a clean energy trade association. "State leaders, public utility commissioners and regional grid operators need to ensure that our electric utilities are planning and delivering the right types of energy investment at least cost."
Utilities including Dominion Energy Inc. are transitioning from traditional demand response programs to also managing more customer-sited resources, said Nathan Frost, Dominion vice president of new business and customer solutions.
"This gives our customers opportunities and tools to take better control of their bill," Frost said.
Customer-sited resources such as rooftop and stand-alone solar and long-duration batteries could help alleviate overarching grid pressure that utilities face as demand from large-load customers like datacenters and overall electrification increases, Kelly said.
"They can be leveraged to reduce demand during peak times," said Courtney Welch, director of policy at financial technology company GoodLeap LLC, which specializes in point-of-sale financing for residential solar and sustainable home improvements.
With the expiration of some federal renewable energy tax credits, Welch said GoodLeap has also "moved pretty heavily" into third-party ownership models through leases and power purchase agreements.
"Our offerings leverage private investment … that goes into supporting the grid for everyone so there's significant cost savings to ratepayers when homes and companies like ours are making those investments and rapidly deploying resources that can provide that type of flexibility," Welch said.
Flexibility is key as the US faces increasing energy costs and skyrocketing demand, driven largely from data centers and other large-load customers.
"We know that electric bills are going to be rising more and more within this year and into the future as we're seeing data centers come online," Welch said.
There's also room for third-party aggregators to alleviate administrative burden and cost from utilities by managing pools of systems that could contribute to overall resource adequacy and potentially be considered in utility resource planning, according to Welch.
"There's no silver bullet," Welch said. "There's an all-of-the-above mindset … driving more collaborative approaches to deploy a much wider range of flexible solutions."
Projected demand growth has shifted what has sometimes been a contentious dynamic between utilities and third-party providers, panelists said.
"With the urgency has come a need to think differently about our approach to enabling [demand response] because we need it now," Frost said.
Utilities are experiencing all new peaks and each season could have entirely new sets of peaks, Frost said.
"We're seeing the load and we need the operational flexibility to be able to do that reliably," Frost said.
Panelists said utilities, third-party providers and ratepayers will need many tools to meet demand and balance affordability, including more behind-the-meter resources, peak time rebates, increased battery storage and virtual power plant programs.
Dominion is planning a virtual power plant pilot program. If successful, it could become "a more common way that we help manage the grid," Frost said.
