The document discusses how distributed energy resources (DER) such as rooftop solar, electric vehicles, and energy storage are positioned for explosive growth over the coming years based on forecasts. It outlines how DER could more than double in impact on peak demand from 46 GW currently to over 104 GW by 2023. While utilities initially viewed DER as a threat, most now see them as both an opportunity and threat. Utilities are increasingly investing in infrastructure and developing marketplaces and programs to integrate DER into their planning and operations. Emerging technologies like blockchain and artificial intelligence could further help develop new transactional systems to optimize DER.

1. Preparing for the Next DER Wave:
Ben Kellison
Director, Grid Research
Grid Edge Innovation Summit: June 21, 2018
Changing Planning and Operational Paradigms to Support Customer
Resources

2. Grid Edge Innovation Summit 2018
BTM DER are Positioned for Explosive Growth1.

3. 2Grid Edge Innovation Summit 2018
5 Classes of BTM DER Contribute 46.4 GW of Impact on the US Power System Peak
Distributed Solar
• Smart inverters will enable volt/VAR support, curtailment and ramping
Source: GTM Research and Department of Energy
US DER and Connected Device Flexibility Potential, 2017
Small Combined Heat and Power (Under 50 MW)
• 18.5% of all installed CHP capacity
Smart Thermostats
• Nearly 20 million purchased today, offering 8.3 GW of cycled peak demand reduction
Electric Vehicles
• 789 thousand EV purchased through Q4 2018, each with the ability to ramp
charging from 0 kW to 20 kw+
Distributed Energy Storage
• Only 160 MW today, California represents 90% of non-resi and 40% of resi market
44%
34%
18%
4%
Distributed Solar
CHP
Resi Smart Thermostats
Electric Vehicles
Distributed Storage
46.4 GW

4. 3Grid Edge Innovation Summit 2018
0
20
40
60
80
100
120
2017 2018 2019 2020 2021 2022 2023
ImpactonPeakDemand(GW)
Distributed Solar CHP Resi Smart Thermostats
Electric Vehicles Distributed Storage
US DER and Connected Devices Impact Expected to More Than Double from 46 GW to 104 GW
46.4
104.2
Source: GTM Research and Department of Energy
US DER and Connected Device Impact on Peak Potential, 2017-2023

5. Grid Edge Innovation Summit 2018
Current Attitudes and Initial DER Integration Efforts2.

6. 5Grid Edge Innovation Summit 2018
Poll Question
Complete the following sentence:
“Utilities view DERs as a _________ to their business model.”
A) Opportunity
B) Threat
C) Both a threat and opportunity
6/20/2018

7. 6Grid Edge Innovation Summit 2018
DERs are No Longer Synonymous with the Utility Death Spiral
6/20/2018
42%
3%
55%
Opportunity
Threat
Both a threat and opportunity
Source: West Monroe Partners and GTM Research

8. 7Grid Edge Innovation Summit 2018
The US ‘s Largest Distribution Utilities Continue Increase Investment in Distribution Infrastructure…
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Structures Station
Equipment
Overhead
Conductors and
Devices
Underground
Conductors and
Devices
Line
Transformers
Meters Street Lighting
and Street
Signals
Millionsof$US
2010 2011 2012 2013 2014 2015 2016
Source: FERC Form 1
Net Distribution Plant Additions Among Largest US Utilities
60%
40%
Represented Not Included
Data Sample (by # of customers)

9. 8Grid Edge Innovation Summit 2018
Over 100 Utilities have Set Up at Least a Basic DER Marketplace
Source: GTM Research
Current DER Marketplace Deployments by Regulated Utilities, Q4 2017
Number of Customers
Vendors
EFI
Simple Energy
Enervee
Internal Development
PlanetEcosystems
Multiple Vendors
3 Million 2 Million 1 Million 500,000
60
million
customers have access to a
utility marketplace

10. 9Grid Edge Innovation Summit 2018
(141 Projects)
1,721MW
19 States are Developing NWA Projects with a Variety of Business Models
Source: GTM Research
Non-Wires Alternatives Capacity and Pipeline by State, Q4 2017
49%
24%
12%
7%
8%

11. Grid Edge Innovation Summit 2018
Utility Business Process Design and Enablement2.

12. 11Grid Edge Innovation Summit 2018
Planning and Asset Lifecycle Processes Must Be Augmented to Account for DERs…
Planning Operations O&MCustomer
Interest

13. 12Grid Edge Innovation Summit 2018
…Because While the Concept is Simple, Integrating DER into (Digital) Utility Processes is Hard
Source: “DERMS: A Term Gone Too Far? DER Lifecycle Is Not Limited to DERMS,” GTM Research
Mapping Legacy and New Utility Systems to the DER Lifecycle Process

14. 13Grid Edge Innovation Summit 2018
However, the Results Sets the Foundation to Enable a Variety of DER-Related Capabilities
Develop NWAs and Optimize Infrastructure Investment,Market, Sell and Connect DERs
Enhance Reliability, and OthersAddress System-Wide Peaks,

15. 14Grid Edge Innovation Summit 2018
Emerging Technology Will Build on This Foundation to Develop New Transactional Systems
New Applications,New Platforms, New(ish) Technologies, or Other?
Blockchain
AI
Artificial Intelligence
Distributed Intelligence

16. Grid Edge Innovation Summit 2018
Conclusion4.

17. 16Grid Edge Innovation Summit 2018
The DER Opportunity is Real, and Utilities Are Working to Secure Part of the Pie
Source: Wood Mackenzie Power and Renewables
Peak Capacity of DERs Covered vs. NYISO Bulk Generation, 2018
Source: Wood Mackenzie Power and Renewables
Peak Capacity of DERs Covered vs. ERCOT Bulk Generation, 2023
40.0 GW 107.1 GW72
54.9 GW 104.2 GW

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Thank You
Grid Edge Innovation Summit: June 21, 2018