How Utilities Will Thrive — Eventually — with a DER-rich Grid

Share Button

In the near term, utilities need to beware. The next two years bring strong risk that customers will go off-grid with rooftop solar and other distributed energy resources (DERs) while using the utility for occasional backup, says a new report.


EV Charging, photo by Lisa Cohn

But by 2040 the prognosis changes. Electric vehicles (EV) and electric heating — both decarbonization efforts — will boost utilities’ peak demand by 63 percent.

The report, from consulting firm Accenture as part of its annual “digitally enabled grid research,” says that 95 percent of utility executives surveyed see a “significantly increased” risk of customers going largely off-grid in the next two years.

So what’s a utility to do between mass defection and mass adoption of EVs and electric heat?

Utility distributors must quickly move to innovative, high-value business models that will drive new growth, says Miki Deric, Accenture’s North America transmission and distribution lead.

Options for utilities

More than half of the survey’s respondents globally said that owning DERs and storage will help their businesses in the future. Large-scale distributed resources (DG), grid-connected storage; small-scale prosumer DG; and community storage are some of the assets the utilities should own, said the survey respondents.

The ability to invest and own such assets will depend on local regulation, but in some markets companies are developing new businesses that can pursue opportunities outside the regulated business.

To determine what new businesses best suit them, utilities need to identify technologies and digital innovation that can mesh with their core businesses, says Deric.

As utilities work to integrate DERs, they may grow into “intelligent grid optimizers,” improving their grids so they can operate new energy devices and move into new commercial models, he says.

This will allow companies to increase profits beyond regulated asset growth.

One option would be for distribution utilities to allow other players to launch new services over utility networks. “Our survey shows that executives see opportunities in new platform plays. For example, a distributed generation/renewables platform could allow participants to trade power and ancillary services,” says Deric.

Not only must utilities move to new business models; they also must grapple with rooftop solar and other DERs on their systems increasing faster than they can build new grid capacity to handle the resources, says the report.

Free Resource from Microgrid Knowledge Library

off the electric grid
How to Get Off the Electric Grid, Stabilize Cost & Increase Efficiency
This new report from Mesa Solutios explores how to get off the electric grid, and do it while retaining  and increasing reliability, efficiency, and cost stability. "There’s a lot to unpack here, but I don’t mind unpacking it...", says Thomas Poteet, VP, corporate development, at Mesa Solutions.
We always respect your privacy and we never sell or rent our list to third parties. By downloading this White Paper you are agreeing to our terms of service. You can opt out at any time.

Get this PDF emailed to you.

DERs alter demand

“According to 95 percent of the executives surveyed, DG is growing at such a rapid pace that it is outstripping utilities’ ability to build new grid capacity to handle it, particularly in high-demand areas,” he says.

DERs alter utility demand profiles, Deric notes. For example, California recently changed the schedules of its time-of-use options to reflect increases in rooftop solar and a peak demand that occurs later in the day.

“On the surface it would seem that increases in DG would reduce the need for distribution network capacity by increasing generation closer to demand locations,” he says.

In reality, the issue is more complex because power networks were built with the assumption that power would flow from large centralized generation sources, one way, to homes and businesses

Part of the problem is that peak output from consumer distributed generation doesn’t usually coincide with peak demand. For instance, most European countries have a demand peak on winter evenings when PV output is zero.

“This means that distribution utilities will still have to invest in network assets to meet growing peak demand even if the total demand is stagnant,” says Deric. “Our survey indicates that utilities should act now to improve forecasting in order to avoid the excessive grid-reinforcement spending required to host new DG energy flows.”

Three technical challenges for utilities

By maradon 333/

To host DG, utilities must address three technical challenges, he says. First, they need to maintain network voltages so they don’t vary beyond set limits that could damage customer and grid asset equipment. Second, distribution businesses need to bolster network protection systems so they don’t operate outside of acceptable limits.

“DG can, for example, incorrectly trip feeders, block or desynchronize reclosing protection and create unwanted islanding of parts of the network,” Deric said.

Third, utilities must ensure their systems can provide the network capacity needed for DG owners to export excess generation without causing reliability or quality issues to other customers.

“At times of high exports, significant amounts of electricity may need to be moved away from low-voltage residential areas to higher voltages, reversing the normal flow of electricity on the system,” he says.

Meanwhile, over the long-term, EV adoption is expected to boost peak demand. EV adoption can also provide growth opportunities for utilities, which can build EV charging infrastructure.

“While the total percentage of electric vehicles in the overall vehicle stock is forecast to only grow from 1 percent this year to 3 percent by 2025, it could rise to 37 percent by 2040, led by municipal buses, scooters and small commercial vehicles. This equals an increase of 530 million electric cars by 2040,” says Derik.

EVs are epected to have a bigger impact between 2025 and 2040, and increase nearly fourfold by 2040.

Big leap in EV use in France and California

“In some markets like France and California, EVs are set to have a meaningful effect on total electricity demand from as early as the mid-2020s and reach 10.2 percent and 8.2 percent, respectively, by 2040.” he says.

That means peak demand could increase.

“Our modeling predicts that, following a period of stagnation, electricity demand could grow by 30.7 percent between 2026 and 2036, due in large part to the rise of EVs and electrified building heating, while the average electricity consumption during the peak demand hour could rise by 62.5 percent from 2016 in 2040,” Derik says.

Even though this high growth will benefit utilities, it could hurt grid stability.

“The key will be to navigate this disruption by making the grid more resilient through greater use of smart technologies and utilizing all sources of flexibility including on the demand side, adopting a more customer-centric approach.”

Accenture’s message: Utilities need to move quickly to address the disruptions expected from DERs and to take advantage of their virtues.

Track news about utilities and DERs. Subscribe to the free Microgrid Knowledge newsletter.

Share Button


  1. Utilities have a great asset, to help across the rough patch. It is the wide easements for high voltage lines, across cities. DC Transformer connected solar panels, can ignore the narrow shadows from the high voltage lines, and allow solar installations close to the new loads [charging stations]. Source, load, and storage, are all DC, here, and it makes sense to connect them with DC lines, linked by more DC Transformers.

  2. Smaller and less populated load areas such as neighborhoods, industrial parks, institutions, smaller towns, smaller or larger cities and even counties can also back intermittent wind and/or solar energy sources with AC or DC power derived from their own area available urban biomass, municipal trash and flood, demolition and storm debris once these entities see and understand the advantages of thermal conversion technologies.