In a previous post I discussed how utilities are evolving a new business model—Utility 2.0—to handle a more dynamic, bidirectional power grid. What does that grid look like? Since a picture is worth 1,000 words, here are two charts that capture the Utility 2.0 dynamic.
Stagnant load growth
The rate of electricity load growth in the U.S. has declined steadily since 1950, as shown by the green line in the chart above from the U.S. Department of Energy. This means that utilities can count on diminishing revenue growth from their traditional core business of delivering kilowatt hours to customers. Load growth dipped into negative territory during the Great Recession of 2008.
As load growth has declined, growth in gross domestic product (GDP) has stayed fairly consistent. In the 1980s, electricity load growth rates dropped below GDP growth rates. In other words, a major economy like the U.S. can continue to grow its economy with declining levels of electricity consumption.
Greater load variability
As overall load growth has declined, daily load volatility has increased. The chart above from the California Independent System Operator shows the growing disparity between afternoon and evening consumption. With the continued growth of energy efficiency and rooftop solar power, customers are using less power from the grid during the day. When evening falls and solar production drops off, customers return to drawing power from the grid.
Managing low growth, high volatility with situational intelligence
Utilities and grid operators currently use the real-time visual analytics of situational intelligence to predict, analyze and manage short-term volatility on the grid. Analytics allows these organizations to optimize their grid and associated distributed energy resources, and minimize their operations and capital outlays.
This improved financial performance helps maintain revenues and profits in the face of stagnant load growth. Those profits, in turn, fund investment in new energy resources such as energy storage, electric vehicle infrastructure and utility-scale renewables.