For a normal household or commercial building, electricity is a one way transaction. Your local power plant uses fossil fuels to generate electricity and a big retail energy provider (REP) sends you a bill.
During peak hours, centralized power plants can be slow to adjust to sharp spikes or drops in demand, leaving consumers to pay exorbitant prices. Just one or two hours of consumption at peak times can jack up an electricity bill. On top of that, electricity often has a long way to travel from the plant across the grid before it reaches the consumer, resulting in the loss of 5-10% of electricity due to heat and resistance. Finally a single point of failure during a storm or an outage could put entire regions out of power with no back up.
The solution to these issues is to decentralize electricity generation, and some are doing so by implementing distributed energy resources (DERs).
DERs are small, modular energy generation and storage technologies. This includes solar panels, battery storage systems, electric vehicles, and demand-side management programs like smart thermostats. While DERs frequently incorporate renewable energy technologies, they can also include fossil fuel-based generation. Their defining characteristic is not the energy source itself, but their proximity to the end users they serve.
The beauty of this technology is not just that it democratizes energy, giving consumers more transparency and control over their own electricity consumption and prices, but that it changes the nature of how we interact with and withstand the grid as a whole.
One company at the forefront of DER implementation is David Energy, a gridtech business working to empower customers with DERs and challenge what it describes as the “Goliath” retail energy companies.
In conversation with James McGinniss, David Energy CEO, he outlined the numerous benefits of DER’s for consumers, citing participating restaurants, laundromats, gyms, and coffee shops. McGinniss described the flexibility and transparency DER’s gave owners to track their consumption via their software and prepare for peak hours by drawing energy from the grid during off hours and storing it, thereby reducing the consumers energy bill.
This benefits not just the consumer but the grid as a whole. In drawing and storing energy during off hours, the consumer lightens the demand during peak hours putting less strain on the grid and other users. Imagine what a huge network of connected devices could do to reduce stress and bottlenecks.
While democratizing energy and saving money for consumers are certainly huge motivators for David Energy, they also maintain a goal of decarbonizing the energy sector. The energy sector is the leading contributor to climate change, accounting for 75% of all greenhouse gas emissions.
Centralized fossil fuel-based power plants negatively impact the environment by filling the air with carbon dioxide, sulfur dioxide, nitrogen oxides, mercury, and particulate matter depending on the fuel. They also use water for steam production and cooling which may be full of contaminants when returned to water bodies. Other impacts include solid waste generation like ash and land use for facilities and transmission lines.
On the other hand, DER’s like rooftop solar panels, small-scale wind turbines, modular batteries, and electric vehicles act as virtual power plants or VPPs which can store renewable energy and feed it back into the grid. By relying on renewable energy sources rather than fossil fuel power plants, participating consumers can actively reduce their energy carbon footprint.
Additionally, sourcing electricity from your own DER right at home or at your business cuts down on transmission losses from far away power plants, thus increasing energy efficiency and lessening the overall carbon output.
But this network of energy saving devices only truly comes to life when there are enough pieces on the board, and McGinniss says the adoption curve is rapidly increasing. He believes that plug-in solar and storage will soon become a massive part of the power grid.
David Energy freely installs and maintains its plug-in batteries and sets up users with their automated software which optimizes distribution times and passes the savings along to customers. The company guarantees that customers will pay less than their utility. David Energy has seen a 198% increase year-over-year in their commercial business.
With penetration like this and adoption mounting, the future of the power grid is surely changing. While the industry faces some resistance from old-school retail energy providers, the enthusiasm for the future of this technology is undeniable.
