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How quickly things change. Our power grids were initially designed for continuous, centralized energy production. However, today’s electricity consumers seek more control over their energy future and are driving the growing presence of distributed energy resources (DERs).
This growth is disrupting utility operations. With the onboarding of climate change policies and renewable energy goals, utilities that adopt hybrid strategies – those that combine software, processes, and all types of energy generation – are best suited to support grid flexibility into the future.
The need for power grid flexibility is rapidly evolving
Until recently, grid flexibility involved utilities enrolling large industrial energy consumers in load curtailment and demand response (DR) programs to help adjust the balance between supply and demand. These electro-intensive users would reduce or shift their energy use during peak periods, often in return for financial incentives.
But today, demand is much higher, and grid flexibility is more complex. Investments in renewables mean energy flow is bi-directional, with decentralized energy coming from multiple DERs. Grid resilience is a priority as electrical demand increases, and, in some cases, political instabilities threaten grid reliability.
Electrical demand is also growing dramatically, and many utilities are working to expand their flexibility by adding capacity. If the world is to meet its net zero commitments, utilities will need to double their flexibility by 2030.
Prosumers – those producing and consuming energy – are now stakeholders and have amplified the need for grid flexibility.
What is at stake
Traditional demand response shows its limitations in balancing an evolving grid. Electric utilities need flexible options to help manage today’s new variabilities and uncertainties. To enhance power system flexibility, utilities need to enroll commercial, industrial, and residential buildings in their demand response and Virtual Power Plant (VPP) programs.
This is a critical paradigm shift for utilities. Given the pace of innovation, it is challenging to strategize for a future that includes rapidly growing distributed energy resources.
Plus, upgrading a decades-old grid takes time and represents large capital expenditures. Grid-connected prosumers, an increase in electrification, and climate uncertainty also mean energy demand will continue to be variable and uncertain.
Power grid utilities must be ready for future adaptations – a flexible grid is a more efficient and resilient grid. Therefore, they need to adopt a proactive approach to deal with these uncertainties or, in the future, risk a more vulnerable position.
Challenges become opportunities with a digitized grid
A digitized grid – one that adapts to variable energy sources and responds to dynamic challenges – is needed to identify, enroll, and aggregate distributed energy resources. These Grids of the Future enable sustainability because they can better incorporate DERs to improve grid resilience. They adapt faster and are more responsive to weather crises or even political instabilities, are more sustainable, more reliable, and can reduce operational costs with predictive maintenance strategies. Digitized grids will also help us transition from carbon-intensive power generation sources toward the ultimate net-zero goal.
Solutions for our hybrid future
The coming flexibility evolution (or perhaps revolution) in DERs will have to address all stakeholders of grid digitization.
At the Prosumer level, we see a hybrid future taking shape. On one side, more IoT-connected assets (buildings, houses, EVs, and so on) are online, ready to be dispatched and aggregated. These assets are looking for the right “flex” compromise between efficiency through more automation and freedom of choice through more customer engagement platforms. And on the other side, with the uncertainties of energy availability, I am convinced we’ll see a growing number of assets moving “off the grid” and becoming less dependent on grid availability: homes capable of energy generation and storage, assets that promote auto-consumption, or that leverage microgrid technologies.
At the grid management level, utilities must optimize each hybrid prosumer “participant” by directly incorporating the technology or via services vendors (for example, VPP service vendors or aggregators). Regulatory authorities will also play a key role in clarifying the degree of contribution and the possible contractualization within the ecosystem.
So in this hybrid world, what kind of prosumer will you become? Connected, automated, and contributed, or autonomous and independent? In my opinion, we will not reach flex targets using a single model. In many geographies and regulatory environments, it will likely be a mix of both.
At the Distribution System Operator level, EcoStruxure DERMS (Distributed Energy Resource Management System) is tailored to enable the efficient planning, design, and operation of today’s flexible, dynamic grid. It maximizes the connection of renewables and electric vehicles by leveraging DER flexibility at every level. This approach supports small proof-of-concept projects to full-scale deployment rollouts that require direct device monitoring, control, and integration with third-party aggregators. Schneider Electric provides DERMS either as a stand-alone or to complement an existing advanced distribution management system (ADMS).
Grid flexibility is key for future needs
As a recognized leader in DERMS and prosumer solutions for commercial, industrial, and residential buildings, Schneider Electric sees utility grid environments changing fast. It can seem challenging, but these are also new opportunities.
Every aspect of power grid operation must now address flexibility – it is the cornerstone of sustainability, operational efficiency, reliability, and resilience.
To do so requires grid balance – from transmission and distribution to prosumer engagement. With a hybrid strategy, it’s possible to transform DERs in a way that offers many benefits to prosumers, supports decarbonization and sustainability, and ensures grid resilience and reliability. For more information, download our Grid to Prosumer guide, which includes utility use cases spanning the utility control room to the prosumer, and highlights a holistic set of solutions for DER and grid data management.
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