The electricity revolution that’s happening today is inevitable. The fossil fuel sources are diminishing and there is an increasing need to focus on alternative methods to source the world’s electricity demand. Electric utility companies are trying to find new pathways to retain their customers.
The newer electricity sources are backed up by solar panels, home batteries, electric vehicles, and smart technologies. Consumers today are increasingly aware of cheaper, eco-friendly alternatives and are willing to opt for them over traditional electricity methods. Distributed energy resources (DERs) are these alternative energy methods. Utilities have no control over these DERs and are a factor which is worrisome.
To channel these worries of utility companies into constructive ways, dealing with the electricity revolution, researchers at the MIT Energy Initiative (MITEI) have produced a guide called “The Utility of the Future.” The guide aims to help utilities, regulators, and policy makers with a better perspective on the various factors which are driving the change in power systems. Doctoral student working on the Energy Initiative project, Jesse Jenkins, said that in a regulated marketplace like electricity, regulation and policy are driving aspects, and it is difficult for utilities to implement their own strategies. There is a possibility only when regulation and policy are proactive and innovative as the regulated businesses.
The report reiterates that the cost of delivering electricity is dependent on the demand. Some power plants that are designed to deal with peak time power surges are expensive and inefficient to run. The charges by utility companies currently are at a flat volumetric rate and are directly associated with usage, which means you pay more as the usage increases. The report suggests varying of the cost of electric throughout the day, depending on the place, and based on real-time prices with prevailing conditions could be a better way to sell electricity.
Consumers can save money with the use of smart meters and new internet and communications technology (ICT) solution. This could help consumers with recognising their usage patterns and adjust them. Utilities can adopt a transparent and efficient retail market to capture time and location value of energy and thus manage prices.
Utilities are affected by net metering currently, which is basically how utilities pay retail rates to owners of rooftop solar panels. Another area which is becoming more affordable for the public is energy storage, which offers flexibility for utilities and is useful. Electricity revolution is inevitable, and utilities can learn and benefit from them.