Regulators take center stage
There is so much more to cover but let us leave the final word for the area of regulation. The development of DERs within Utilities is still in its infancy and many models will be followed before the best ones solidify. As always, the regulators have a big hand to play in this. Innovations in service provision, rate design and investment priorities will have to be created and approved – and at a pace that may make some dizzy.
One of the contentious debates this year for regulators will be on Net Metering and more broadly on rate design. The pressure to reduce the rates for Net Metering will continue to increase as Utilities justifiably claim that roof-top solar users do not pay their fair share of the infrastructure and grid maintenance costs. Benjamin Inskeep of EQ Research points out that the conversation will be on what the future Utility will look like and how Distributed Energy Resources will fit in.
The challenge will be with the regulators trying to balance the opposing pressures from Utilities and roof-top solar users and focus on rate design that encourages innovation and network reliability.
When new energy storage systems can be implemented more quickly than deploying new gas peaker plants, regulators need to find a way to ease this path rather than act as a block on innovation. With the current uncertainty around the new US administration it will be interesting to see how they respond!