There is no doubt that the recent unprecedented heat waves, floods and tornadoes that have hit the northern hemisphere have been largely due to climate change. Climate impacts like these have been a major talking point at recent G20 meetings, prompting the release of the Ministerial Energy and Climate Communiqué on July 23. The statement underscored the importance of Distributed Energy Resources (RED) in addressing climate and energy security challenges. In addition to their decarbonization and climate change mitigation benefits, DERs can help protect against the impacts of extreme weather events.
However, many electric utilities still struggle to understand how DERs fit into the larger energy landscape. What are they and how can they be used to improve grid reliability and save energy costs? Is it worth it?
DERs can produce or store energy, or manage its consumption depending on the type. The term “DER” covers a wide range of technologies located close to customers, such as energy efficiency and demand response solutions, solar photovoltaic (PV) assemblies and batteries. DERs are sometimes more narrowly defined as “behind the counter” resources. Solutions behind the meter can be a sort of black box, offering little transparency to network operators or utilities.
While energy efficiency and demand response solutions are not new, rooftop solar and electric vehicles (EVs) have recently been driving the growth of DERs in some countries. The IEA estimates that 179 GW of distributed solar power was added globally from 2017 to 2020. China and the United States contributed almost half of the new installed capacity. The fleet of electric vehicles has tripled since 2017 to exceed 11 million in 2020. Almost 80% of cars circulate on Chinese and European roads. These trends are expected to continue in more countries in the years to come.
DERs support decarbonization in several ways, including supporting fuel switching. Distributed solar can replace fossil fuel generators. Electric vehicles are making it possible to switch from oil for transport on a large scale to electricity. As the scale of clean, renewable electricity supply increases, electric vehicles and other electrification solutions may expand its use into new sectors. In the IEA’s Net Zero scenario, global sales of electric vehicles increased 18-fold, from 3 million to 56 million. In addition, some 600 million heat pumps will provide clean heating by 2030, while solar PV will more than quadruple to reach 633 GW by the end of this decade.