Cleantech Market Intelligence
Enhancing Grid Resiliency through Collaboration
After nearly 11 years without a major hurricane in Florida, Hermine hit the gulf coast in early September 2016. While it was a relatively small hurricane compared to others that have hit the region, the storm caused widespread power outages that lasted for over 4 days in some parts of the state. Many areas that saw outages experienced no significant wind damage or flooding, yet were left in the dark due to damaged power lines many miles away. As with most major storms, Hermine served to highlight the fragility of a centralized electricity grid dependent entirely on large-scale generation and long-distance transmission networks. Despite being very susceptible to this type of extreme weather, Florida lags behind other states in efforts to modernize its grid and improve resilience against major storms.
The impacts of Hurricane Sandy in 2012 drove many northeastern states to push significant grid modernization initiatives aimed at limiting the potential for outages from future storms. Much of this activity focuses on deploying microgrids—including energy storage and solar PV—to provide backup power to critical facilities including police and fire stations, communications infrastructure, and gas stations in the event of a major grid outage. Given the greater risk of extreme weather in Florida, energy storage and microgrids could provide much more value than in other parts of the country. However, deployments of these technologies in the state have been limited to date.
The rapidly falling costs of distributed energy resources (DER) including solar PV and battery energy storage systems have resulted in utilities around the world looking to both improve grid resilience and customer relationships by offering these new technologies. One emerging opportunity, explored in Navigant Research’s recent Residential Energy Storage Systems report, includes utilities deploying networks of solar + storage systems for residential customers. These projects have numerous benefits for both utilities and customers, including:
- Reduced need to upgrade infrastructure to meet peak demand
- Provide greater visibility into conditions on distribution circuits
- Easier integration of distributed solar PV systems
- Enhanced customer engagement
- Backup power for customers
- Maximum use of solar PV onsite for customers
Innovative business models are being explored both in the United States and internationally in order to maximize the value of residential DER as utilities recognize both the potential and risks presented by these technologies. Despite the contention surrounding ownership and deployments of DER in many areas, partnerships between utilities, solar PV, and storage providers are emerging as a popular model. Utilities including Consolidated Edison in the United States, PowerStream in Canada, and Ergon Energy in Australia have partnered with leading DER providers to offer combined solar + storage solutions for their customers. Though these offerings are mainly limited to pilot projects, early results have been positive for both utilities and their customers. This type of model could provide a solution to the contention surrounding solar PV development in Florida while also limiting the effects of future storms.