Can utilities fix the energy equity gap with renewables?
- Jan 10, 2022 10:53 pm GMT
Utilities are uniquely positioned to tackle electricity costs at the point of generation by adding more distributed energy resources to their grids.
Much has been said about how low- to moderate-income (LMI) households can and should benefit from the availability of distributed energy resources (DERs). Currently, LMI households bear a higher energy burden than more affluent ones because a larger portion of their income goes toward energy costs.
The national average energy burden for low-income households is 8.6%, three times higher than for non-low-income households which is estimated at 3%. U.S. Office of Energy Efficiency & Renewable Energy
In theory, LMI homes should be able to capitalize on lower energy costs by installing DERs like solar PV and batteries. For this reason, many assistance programs are aimed at increasing DERs on LMI homes. Programs such as California’s Self-Generation Incentive Program (SGIP) and SOMAH support the installation of battery storage systems or solar PV, respectively. Focus has also been placed on research that examines the efficacy of various policies and programs aimed at increasing DER adoption among LMI households.
But U.S. electricity costs continue to rise and the equity gap is not closing fast enough to benefit those who can least afford to pay more for their energy.
While utilities have been active participants in supporting these programs and initiatives, there may be an additional role for them in closing the energy equity gap.
Utilities charge consumers based on their consumption, and it is up to the consumer to mitigate these costs through available programming, rebates or by reducing or shifting their power consumption. Wealthier consumers have greater ability to purchase energy efficient and smart appliances or to install solar PV and storage systems, and often have greater flexibility in when they consume power—all of which can help offset their energy costs. LMI households don’t always have access to these benefits.
But what if utilities took on the burden of adding solar and storage to their own energy infrastructure and then provided this power to everyone? Wouldn’t this be a more equitable means of democratizing access to safe, clean, and inexpensive power?
Some utilities have shied away from promoting solar and storage due to concerns that they will create grid instability. However, with today’s software, that is no longer a legitimate concern. Distributed energy resource management systems (DERMS) have sophisticated algorithms that can simultaneously balance resource, load, demand, and network constraints while enabling renewables — in some cases even allowing for a 100% renewable grid.
With oversight over the entire grid, a DERMS can coordinate utility-owned assets alongside customer-owned ones, and by perceiving the system as a whole, it can identify opportunities to shape, shift and balance power across the entire system rather than solely at the point of generation or demand.
This level of control frees utilities up to add any number of their own DERs while also supporting the addition of customer-owned DERs—without compromising on power safety or reliability.
By adding a DERMS to control their grid, grid operators can facilitate individual DER additions by those households that can afford it, while providing safe, reliable, renewable power from their own assets to those who can’t--resulting in an equitable pathway forward to the new energy future.
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