Founder and CEO of HData, helping the energy industry manage and understand regulatory information.
You probably have a distributed energy resource (DER) and you don’t even know it! DERs are small energy generation and storage technologies, like EVs, smart appliances and solar panels. In addition to the novelty of a new kind of portable power, they present the opportunity to play a large role in mitigating the impacts of climate change. For power companies, DERs present an opportunity to diversify their energy sources—something that everyone in the industry is grappling with.
Understanding The State Of DERs Today
DERs are growing in popularity, but very few regulators or utilities are keeping pace. Before utility companies can even begin to leverage the power that DERs contribute, they must simply know how many units their customers have and make smart decisions about how they build the lines and systems to accommodate them. That industry just isn’t there yet, largely because of a lack of data.
Regulators have a role to play in this evolution as well. They can feed valuable data back to the energy industry to help foster healthy growth of DER adoption, as well as intelligence that allows for the seamless incorporation of DER-generated energy into grids across the country.
As is the case in most data-rich industries, access and standardization are needed to unlock the data’s value. When data is managed well, regulators are able to be transparent, empowering data sharing and analysis. When data is aggregated, utilities can make smarter investments in their infrastructure and work with regulators to identify systemic needs like building more meters, smarter meters, and better transmission and distribution lines.
We’ve seen the benefits of data transparency and standardization already in the regulated utilities industry; in 2019, the Federal Energy Regulatory Commission (FERC) instituted mandates to do just this.
When the FERC adopted the eXtensible Business Reporting Language (XBRL) standard for receiving and processing data, they proved that the right data structure can have significant benefits, especially for financials. In the FERC’s case, they were able to transform the system by using XBRL to transform PDFs into machine-readable data that users could collect and disseminate easily, effectively up-leveling the data-driven, decision-making potential for the entire industry.
This means it is now possible to analyze utilities’ financial performance instantly, on a line-item basis, and even set up comparisons that change automatically whenever new reports are filed.
With the FERC’s new XBRL mandate, the blueprint for unlocking the value of DER data already exists. With better data collection and dissemination, regulators, states and utilities all stand to benefit. They can communicate and create technologies that aggregate data and quantify how these new energy sources are impacting the grid. They can make smarter decisions about investment and long-term growth.
Steps Toward Innovation Through DERs
Today, a few states are working to aggregate DER data to better understand the evolving energy grid and how to monitor it. The state of New York has a great DER website and dashboard that aggregates information on DERs across the state, providing a glimpse into the macro-level impact of these projects. The Minnesota Public Utilities Commission (PUC) requires that utilities report on DERs connected to their distribution systems and then publish the data. This provides a treasure trove of raw data that is useful for utilities and other regulators when designing incentives around DERs. But these two initiatives are hardly the norm; for most regulators, data is still very difficult (if not non-existent) to get.
Better data reporting and sharing on DERs can also help drive effective performance-based rate making. Ideally, regulators will build incentives that lead utilities to focus on DER programs and the necessary interconnectivity infrastructure. But they first need the data to understand how effective incentives should be structured.
Furthermore, tech leaders in the industry can make a big difference in the growth of DERs. By enhancing data collection within their organizations, they can leverage advanced analytics and data science techniques to gain insights into customer-owned resources. Tech leaders should also explore technologies that facilitate real-time monitoring and control of DERs to enhance their visibility and management. Building these systems improves grid reliability and allows utilities to optimize the integration of DER-generated energy.
With these actions, tech leaders can harness the transformative potential of DERs while helping to grow a more sustainable and resilient energy infrastructure.
Final Thoughts
As usual, technology is advancing at warp speed, and key players are caught trying to catch up. But as some states have already shown, there is time to move quickly and organize energy utility data to help the grid become more efficient, resilient and profitable when it comes to leveraging DERs.
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