Distributed Energy Now Outpacing Centralized Generation

Schneider Electric and Duke Energy Renewables developed advanced microgrids to serve the Montgomery County (Md.) Public Safety Headquarters (PSHQ) and Correctional Facility. The microgrids provide increased resiliency and sustainability at both sites. Photo Credit: Schneider Electric

According to a new report, "Global DER Deployment Database," from Navigant Research, new global capacity deployments of distributed energy resources (DER) are outpacing the deployment of new centralized generation capacity. In other words, the global electric power industry is facing a transformation from centralized generation (such as large coal, natural gas, hydro and nuclear plants) toward decentralized sources (local energy generation, such as solar photovoltaic, wind, energy storage, microgrids, etc.) that utilize two-way energy flows within the nation's electric grid.

The report provides capacity and revenue forecasts for 12 leading DER technology markets, including distributed generation, energy storage, plug-in electric vehicle (PEV) charging load, demand-response, and energy efficiency.

Navigant predicts the impact of this trend on utility revenue will become more pronounced as DER technologies gain more traction.

"This mix of DER technology and smart grid solutions is poised to disrupt traditional utility models for end consumers, and it will be among the most disruptive trends to the traditional energy industry over the next decade," the report states.

According to the report, declining technology costs and innovative, long-term, price-based instruments support DER's ongoing development and grid parity. While DER also supports electrification needs for on-site generation, new additions of centralized generation technologies greatly influence the proportion of DER technologies in the system.

"Most energy companies and utilities are already wrestling with revenue erosion due to energy efficiency, demand-side optimization and solar PV," said Pritil Gunjan, senior research analyst for Navigant Research. "As deployments of distributed generation and energy storage, PEVs, and demand response gain further traction, the impact on incumbent revenue will become more pronounced."

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