Research reveals 59% of utility heads expect an increase in grid faults by 2020

Utilities face the greatest risk of lost revenues from distributed generation (DG), including residential solar photovoltaics and fuel cells, according to research by Accenture.

The Digitally Enabled Grid research, now in its fourth year, surveyed more than 100 utilities executives across more than 20 countries and revealed that 58 per cent of distribution utility executives believe DG will cause revenue reduction by 2030.

The concern is higher in North America and Asia Pacific than in Europe, due to the prevalence in these regions of vertically integrated utilities, which face the double impact of declining energy sales revenue and increased network costs to support reliable energy delivery.

Executives said the biggest DG-related stress on utilities’ network hosting capacity will come from energy prosumers who are driving small-scale DG (cited by 59 per cent), followed by medium or high-voltage connected DG such as a large-scale solar plant (28 per cent).

Accordingly, nearly six out of 10 executives (59 per cent) expect grid faults to increase by 2020, due to more volatile uses of their networks triggered by the deployment of distributed renewable generation.

In fact, 59 per cent believe they will exhaust their DG hosting capacity within 10 years, if they haven’t already.

After that, accommodating new DG on the distribution network will require increasingly high capital reinforcement costs.

In the face of such disruption, only 14 per cent of distribution utilities have a very clear forecast of their potential distributed generation network hosting capacity.

“The rapid evolution of the technology, better economics and the growing accessibility and environmental appeal of residential solar photovoltaics – or PVs – have pushed distributed generation from the fringe to a mainstream factor on the grid,” Accenture Transmission and Distribution managing director Stephanie Jamieson said.

“Combining solar PV with more economical options for battery storage, demand response, and energy efficiency will give consumers more power and require distribution utilities to provide more flexibility and different types of services.

“Despite the challenges the integration of these new technologies at scale bring, it is essential to meet the growing expectations of consumers in order to position utilities to provide services-based business models that could drive much-needed new revenue.”