Study Finds Grid Transparency Behind-the-Meter a Challenge for Utilities

North American electric utilities continue to grapple with the challenge of managing behind-the-meter distributed energy resources (DERs), according to the results of a survey of utility decision-makers published Feb. 15.

A study of 100 leaders from utilities in the U.S. and Canada, commissioned by Siemens and done in partnership with Oxford Economics, found that “limited visibility and understanding of DER behavior creates operational challenges and impacts grid performance.” Data from the survey released Thursday shows that while “solutions such as distributed energy resource management systems (DERMS) exist … data shows adoption to be slow.”

Oxford Economics, a UK-based group with operations in several countries, is considered one of the top groups for thought leadership, global economic forecasting, and econometric analysis.

The joint report, titled “Seeing behind the meter: How electric utilities are adapting to the surge in distributed energy resources,” provides insights into how Canadian and U.S. utilities are responding to the rapid pace at which behind-the-meter energy resources are being deployed.  Data from the study “reveals the extent to which utilities are challenged by behind-the-meter distributed energy resources and the benefits that increased DER visibility could enable,” according to Siemens. Among the findings are that utilities should understand the importance of investing in technologies to boost visibility of assets that are behind the meter, and must also prioritize DER management programs “for a more reliable and stable grid.” The study also said power generators should strengthen “customer trust to boost participation in management programs.”

Want to learn more about distributed energy resources and behind-the-meter applications? Register to attend POWER’s Distributed Energy Conference, part of Experience POWER Week, in Orlando, Florida, Oct. 9-11, 2024.

“The complexities associated with behind-the-meter DERs are a significant challenge to electricity distribution utilities in North America,” said Marcus McCarthy, SVP of Siemens Grid Software, U.S. and Mexico. “Technology can help by providing actionable insights into the opportunities and challenges of these resources to improve grid resilience. The software and digitalization tools we implement today, will not only increase capacity, but aid in reliability— laying the foundation for an autonomous and advanced clean grid of the future.”

Energy Consumers Are Now Producers

The report highlights the rise of the “prosumer,” or how passive energy consumers have been turned into producers of electricity. Siemens wrote that “This transition is an opportunity to tap into alternative sources of power and increase the resilience of the grid to meet sustainability goals.” A problem, though, is that a lack of behind-the-meter visibility means utilities are challenged “in designing cost-effective programs and monitoring.”

The survey found that at least half of the utilities responded that they “have experienced an increase in the adoption of solar panels (64%) and electric vehicles (50%) over the past three years,” and that 59% of respondents said they expect increased penetration of batteries into the market in the next three years.

McCarthy told POWER that visibility into all behind-the-meter DERs would improve utilities’ planning, operations and customer program departments. “From a planning perspective, this would help with allocation of capital investments, extend grid infrastructure asset life and reduce costs. It would also assist the utility in understanding if the current rate case is still valid from the point of view of an asset lifespan or by creating a rate case for investment based on empirical operating data regarding DER impacts on the network,” McCarthy said. “The operations department would experience a reduction in their SAIDI [System Average Interruption Duration Index] and SAIFI [System Average Interruption Frequency Index] metrics, increased productivity through better and faster network problem root cause analysis and reduced O&M [operations and maintenance] costs through a better understanding of the operating conditions of distribution network equipment.”

The report said that “more than half of respondents expect visibility into the behavior and location of all behind-the-meter DERs to benefit their operations department by reducing their SAIDI and SAIFI metrics and increasing productivity.” As automation become more prevalent, and grids move toward autonomy, Siemens said there are three key findings from the report that may be relevant:

• Invest in the technologies that boost visibility behind the meter—a necessity for utilities to successfully navigate the energy transition and future-proof the grid.
• Prioritize strategies like demand-side and DER management programs for increased flexibility behind the meter.
• Strengthen customer trust to boost participation in management programs.

McCarthy provided examples of how DER visibility benefits asset management, and customer engagement. “Understanding the changing asset condition impact for distribution transformers could also be important for fire risk management as ~4% of distribution transformers have a flame out when they fail,” McCarthy said. “Lastly, customer engagement departments would benefit from a reduction in DER measurement and verification costs, helping to scale and focus DER adoption programs to ensure the utility enables customer adoption of DERS with minimal impact on network infrastructure and in line with utility carbon emission objectives.”

Operational Challenges

The report said the operational challenges caused by behind-the-meter DERs “are known but difficult to address due to lack of visibility,” with a need for more clarity about the location of DERs, their size, and their activity. A whopping 70% of respondents said they “rely on interconnection requests and/or integrations with platforms like distributed energy resource management systems (DERMS) to gather information about the location of behind-the-meter DERs.”

The utilities said that on average they have visibility only into 36% of DERs on the power grid through DERMS or other platforms, which creates operational issues. Other challenges, according to almost 75% of respondents, are that customer adoption of behind-the-meter DERs brings voltage visibility and control issues, along with problems such as back-feeding, protection and control coordination issues, distribution transformer and conductor overloads, and also masked or hidden loads.

The study found that demand-side management programs—those that incentivize customers to change their patterns of electricity use, such as running appliances at off-peak times—are one solution. More than two-thirds of utilities in the survey said they are implementing such programs, with plans to expand the strategies in the next five years.

McCarthy said, “To foster this collaboration, utilities are already implementing demand-side management programs which incentivizes customers to modify energy consumption, production and storage patterns. Now, it’s these same models that can help create a payoff for customers to opt-in and allow their utility to manage their DERs which has remained challenging thus far. ”

Siemens reports, though, that only 37% of utilities are operating DER management programs, which involves communication and management by grid operators of DERs to enable delivery of grid services to support balancing demand for power with the electricity supply. That strategy is normally one where customers must opt-in to enable that communication and utility management. That helps explain why only 35% of customers participate in DER management schemes, while 54% are involved in incentive-based demand-side programs.

McCarthy told POWER, “The U.S. power grid has been called both the ‘greatest machine ever built’ and the ‘great enabler’ of our greatest innovations, yet the relationship between utility and customer must adapt to modern times. As most utilities expect to experience growth in penetration of behind-the-meter DERs in the next three years via solar panels, EVs, heat pumps and batteries, this is no longer a simple one-direction provider-to-user dynamic. Instead, both parties can be employed to increase security and reliability of the grid while advancing a green energy future.”

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).