Asset Management

Distributed Power Market Has Five Key Barriers, says Report

Despite the growing popularity of distributed power among utilities and consumers, the technologies still have a number of regulatory and technical barriers, according to a report.

BURLINGTON, Massachusetts, US, 2001-06-08 [SolarAccess.com] Despite the growing popularity of distributed power among utilities and consumers, the technologies still have a number of regulatory and technical barriers, according to a report. “Environmental permitting of small generators and control of load management are other key regulatory issues that are being rigorously debated in many regions,” says the ‘Distributed Power Technology Markets 2000 Study’ produced by XENERGY. The initial spark for interest in DP technologies was grid reliability issues and the ability of DP technologies to offer back-up supply. Now, the report says DP is gaining new momentum as a risk management tool and this new trend is increasing the appeal of DP with energy suppliers, distribution utilities, regulators, and end users looking for insurance against wholesale price spikes and business interruptions due to grid problems. DP is viewed by many as a possible solution for today’s energy crisis, but XENERGY warns that “there are several regulatory and technical issues that need to be addressed in order for DP to offer relief from today’s energy problems.” Until recently, customers have not had the ability or tools to react to price signals, and many are still subject to utility tariffs that deter participation in load management programs. In addition, limited customer understanding of load management benefits and the lack of necessary metering are critical barriers. Several retail power suppliers and electric utilities, including AES NewEnergy, MetroGen, Select Energy, UnigridEnergy, GPU Energy, and Baltimore Gas & Electric, have recently announced new products and services that position DP as a new risk management tool. “The DP Technology Markets Study clearly shows how electricity is evolving as a product,” says XENERGY principal Francis Cummings. “DP is positioned at the center of the retail energy value proposition, offering both pricing and risk management advantages, albeit with many issues that need to be resolved before it gains wider acceptance.” XENERGY is an energy consulting firm based in Massachusetts, with offices across the U.S. and in Canada. It was founded in 1975 and is a wholly-owned subsidiary of KEMA Consulting.