Navigant Research Blog

Integrated DER Maturity Assessment, Part II of III

— July 18, 2016

Energy CloudAs introduced in the first post in this series, Navigant has created the Integrated Distributed Energy Resources (iDER) Maturity Model for electric utilities in an effort to help utilities understand and appropriately adopt DER. DER adoption is one of the most disruptive factors affecting the grid today and into the future. Many North American utilities are unprepared for the dynamic impact these resources will have on current grid operations. For utilities to take control of their future, an iDER strategy and approach is critical. The iDER Maturity Model provides the benchmark for a utility to measure their current state, a guideline for what a mature utility looks like, and a starting point for what the next steps should be.

Navigant’s multifaceted iDER Maturity Model benchmarks a utility against five maturity levels across the following major dimensions:

  • Leadership
  • Regulation and Policy
  • Business Models
  • Customer
  • Operations
  • Technology

For each category, Navigant also defined a one to five “maturity level” scale, as shown in the table below, ranging from Level 1: Inactive DER, to Level 5: Fully Mature iDER Business. By ranking a utility’s maturity across each dimension, Navigant has created a matrix that utilities can leverage to understand and map out a profitable path to the future. To illustrate the maturity levels, two utility profiles describe how organizational initiatives can be benchmarked against our iDER Maturity Model and how the matrix can be used to identify next steps.

iDER Maturity Level Descriptions

iDER Descriptions

(Source: Navigant) 

iDER Maturity Model Benchmarking Categories

iDER Benchmarking

(Source: Navigant)

Example Utility A: Business as Usual Market (Maturity Level 1 to 2)

A utility in a state representative of business as usual (BAU) stayed the course on investing in traditional generation assets and was reluctant to even pursue advanced metering infrastructure (AMI) investments. However, disappointing load growth and increased federal regulations targeting fossil generation of late are undermining long-standing assumptions, causing management to reevaluate priorities. This includes surveying DER opportunities and contemplating shifting investments toward assets and services that would support DER. The question remains of whether these efforts will be too little too late as the utility’s customers increasingly become targets for third-party providers of energy services.

This utility is behind the curve and should use the iDER Maturity Model to identify the starting points for piloting DER initiatives. In addition to planning investments in AMI, the utility needs to begin redesigning and overbuilding targeted portions of its distribution grid, as well as installing control and safety schemes to allow for the two-way power flows seen with high DER penetration. For customers, the utility also needs to begin development of a streamlined process for integrating rooftop solar and electric vehicle (EV) charging stations, and to pilot mutually beneficial customer DER programs. On the operations side, the utility leadership needs to develop IT/OT tools and processes for its operators to manage DER and to help bring DER from the fringe into the mainstream within its organization.

Example Utility B: Grid Reform Market (Maturity Level 3 to 4)

A utility that operates in what could be characterized as a grid reform state (i.e., under aggressive renewable and distributed policies) has taken a decidedly Energy Cloud mindset. Anticipating a more networked grid, this utility has begun developing new services—integrating EV charging with demand response (DR), offering bring your own device programs to customers, etc.—to serve an integrated, plug-and-play electricity system that it believes will enhance the value of individual assets across the network. With the goal of shifting away from the traditional ratepayer model, this utility is taking steps to provide customers maximum flexibility and choice in how they use energy in order to maximize value across the network. To accomplish this, this utility is proactively building collaborative partnerships with technology providers.

This utility has a leg up on many utilities, but can still leverage the iDER Maturity Model to clarify its vision of the future and identify next steps. The utility should focus on expanding the membership to its DER programs through improved customer outreach, possibly implementing a new customer portal, and offering new DER programs in transactive energy, rapid DR response, and targeted residential programs.  On the operations and technology sides, it will be very important to integrate all DER management systems with other IT/OT systems, such as customer information systems (CIS), advanced distribution management systems (ADMS), and meter data management systems (MDMS), to remove organizational and operations silos. As DER penetration grows, operators need to see DER as just one more lever they can pull in managing the grid, just like dispatching additional generation. Finally, as IT/OT systems become more interconnected and complex, the communications network limitations can often become a hindrance—the utility should utilize grid edge intelligence as possible and ensure network security and latency issues are resolved.

 

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