The energy transition is gaining momentum as utility organizations aim toward net zero emission goals. The power sector has large influence on the energy transition as utilities and power companies continue to build out additional renewable and distributed energy resources energy resources and environmentally clean paths to electrification. Utilities and independent power producers are making significant investments to diversify their energy portfolios, and consequently these investments will force the energy industry as a whole to vastly improve its digital capabilities.
Related Reading: IDC Perspective: Utilities and Oil and Gas Sectors’ Initiatives and Strategies to Thrive in the Energy Transition
The utilities and power sector produce some of the highest CO2 emissions across the globe. The energy transition: the movement away from fossil fuels and the investment in renewable and cleaner forms of energy, has put utility and power companies under scrutiny, but it has also put these companies in a position to lead in efforts to reduce global CO2 emissions and establish a cleaner future for the energy sector.
Distributed energy resources will play a huge role in the efforts towards net zero emission for the utility sector. The proliferation of distributed energy resources (DERs) globally has spurred investment and research and development (R&D) efforts in creating innovative technologies that can enable utility distribution networks to manage dispersed and cleaner forms of energy in the most optimal and economical manner. Distributed energy resource management systems (DERMSs) are becoming essential software offerings to help manage the power grid.
Related Reading: IDC MarketScape: Worldwide Distributed Energy Resource Management Systems 2022 Vendor Assessment
In addition to the continued growth of utility connected renewable energy resources such as wind and solar farms, utility distribution operators are now being challenged with growing number of customer-owned DERs that can impact their utility footprint such as rooftop solar, battery storage, and electric vehicles. The expansion of DERs along with the environmentally conscious choices electric customers pursue in the ways they consume, produce and, in some cases, sell excess energy back to their utilities to participate in wholesale and distribution-level power markets is changing the traditional centralized utility system model to one that is more complex, customer driven, and decentralized.
Electricity end users and utility customers will be key in advancing the energy transition and further developing the DERMS market. Currently, one of the fastest-growing DERs is rooftop solar. Rooftop solar plus the ability to effectively manage energy storage will be a cornerstone for any DERMS.
Related Reading: IDC Survey Spotlight: Utility Industry Insights from the IDC Worldwide Energy Transition Survey, 2022
Electricity customers’ participation in the energy transition can be driven by being incentivized to own DERs and participate in clean energy utility programs which can increase the impact on demand response and the increased adoption of electric vehicles which in turn will drive growth and contribute to the inevitable need for DERMSs.
Keep in mind a DERMS is not a one-size-fits-all product. Every utility, distribution system operator, DER owner, operator, and market participant will have their own unique set of needs and circumstances as it relates to distributed energy resource management. Many utilities may be at vastly distinct stages of maturity from a technology and distributed energy resource market penetration standpoint. Utilities will need to understand immediate needs and also be able to forecast and have a vision for future obstacles and challenges in managing DERs. Most DERMS offerings are built to be flexible and can be bought in modules, providing buyers the option to purchase what is needed now and for the near future while having the opportunity to purchase additional modules that may become more important down the line. The trends and evolution of the energy transition, growth in DERs and DERMs will be interesting to track and analyze with the utility and power sector as focal point in the world’s progress toward a cleaner energy future.
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