Can the Developing World Teach the Developed World New Tricks on Energy?
With utility push back on policies that have historically supported distributed renewable energy emerging as a global phenomenon, it might be wise for vendors in the space not to push the panic button, and instead look to emerging markets in the developing world for a reality check.
As utilities and states modify their traditional support for technologies such as solar photovoltaic (PV) systems, purveyors of hardware and software that helps integrate distributed renewables into power grids see increasing opportunity. The decline in generous feed-in tariffs for solar PV, for example, creates new opportunities for energy storage.
Among those sensing opportunity is ABB. When the company purchased Powercorp of Australia in 2011, few thought that this giant company would be integrating this company’s distributed controls approach (and flywheel Powerstore technology) to remote hybrid wind/diesel microgrids into its grid-tied offering. The company is recognizing that a top-down approach to controlling distributed energy resources may not be the best fit. Instead, innovation fostered in off-grid systems which need to provide 24/7 power under the most harsh environmental conditions with a bottoms-up optimization platform is a better approach. HOMER Energy agrees, arguing in a webinar with Navigant Research late last year that the smart grid is being pioneered in places like the Caribbean, Africa and India, not developed world markets in Europe or the U.S.
While the hot topic in the news these days is the so-called utility death spiral, growing numbers of forward-looking utilities and diversified energy companies such as NRG Energy, see proliferation of distributed generation as an opportunity. In fact, NRG Energy is now developing remote microgrids, starting with the private island owned by Richard Branson.
Clearly, the world in the future will not feature a one-size-fits-all business model – especially not the utility monopoly that has slowly eroded over the past century. While long-term planning and dense regulatory proceedings won’t go away, the future of energy requires flexibility, and learning from those where provision of electricity requires the utmost in creativity: the developing world. Other large technology companies, such as Toshiba, are also moving into the remote island microgrid market.