Navigant: DER Deployments Outpacing Centralized Generation Capacity

by | Apr 5, 2019

Navigant: DER Deployments Outpacing Centralized Generation Capacity

Navigant Research published a report that shows new distributed energy resources (DER) deployments outpacing new centralized generation capacity deployment worldwide. The mix of DER technology and smart grid solutions is likely to disrupt traditional utility models for energy consumers over the next 10 years, the firm said.

Called “Global DER Deployment Database,” the report looks at DER technologies grouped into six parts of the value chain that generate, manage, and consume electricity. Navigant forecasts technology capacity and revenue for 12 leading global DER technology markets.

“The global electric power industry is facing a transformation from centralized generation toward a more decentralized grid with two-way energy flows, known as the energy cloud,” the research firm said. “New global DER capacity deployments — including distributed generation, DER, plug-in electric vehicle (PEV) charging load, demand response, and energy efficiency — are outpacing the deployment of new centralized generation capacity.”

Pritil Gunjan, a senior research analyst at Navigant Research, observed that most energy companies and utilities have already been wrestling with revenue erosion from energy efficiency, demand-side optimization, and solar PV. “As deployments of distributed generation and energy storage, PEVs, and demand response gain further traction, the impact on incumbent revenue will become more pronounced,” he predicted.

The report found that declining technology costs and new long-term price-based instruments support the development and grid parity of distributed energy resources. “While DER also supports electrification needs for onsite generation, new additions of centralized generation technologies greatly influence the proportion of DER technologies in the system,” according to Navigant.

In January, West Monroe Partners surveyed more than 1,700 utility customers across North America about DERs in partnership with Greentech Media. They found that 80% of those surveyed said their utility hadn’t approached them with any alternative energy options.

The survey also polled utility executives and managers as well as regulators. “Overall, this survey found utilities are taking steps toward a decentralized energy future, but are not always proactively developing and investing in the services and digital systems needed to accommodate the increasing penetration of DERs,” the researchers wrote.

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