BYOD
Customer Engagement
Demand Response
EV Charging
Incentive Processing
Program Design
Program Management Automation
Flexible Dispatch
Virtual Power Plants
Platform
Grid-Edge DERMS
Customer Engagement
Demand Forecasting
This week, BlackRock, Microsoft, and an assortment of major global economic powers announced a partnership developed to invest in energy infrastructure and artificial intelligence, signaling the fiscal importance of these issues. For context, as of this writing, it would cost more than $2.5t by 2035 to upgrade the U.S. distribution grid, a sobering figure that only promises to inflate with time. Furthermore, climate change-related extreme weather and temperature events not only threaten grid resiliency but cost the world an estimated $16m per hour every day. Investing in infrastructure is a fiscal responsibility during the energy transition and promises to take time and resources to develop. AI is part of the same investment strategy to better manage energy at the device level in demand flexibility programs. So what do these investments tell us about the future of electric utilities?
The State of the Grid
According to the U.S. Energy Information Administration (EIA), the U.S. power grid is made up of more than 7,300 power plants across three major regions. These services are connected by nearly 160K miles of transmission lines, as well as millions more miles of low-voltage power lines and distribution transformers. As of 2020, the U.S. only utilized around 20% of renewable energy sources, a number that promises to increase with time and further investments. The U.S. grid is made even more complex through the weave of interconnections, markets, and regulatory bodies dependent upon the state, creating an additional layer of administrative complexity.
As it stands, many utilities are not prepared to meet the rapidly increasing demand caused by climate change, infrastructure needs, and decarbonization and electrification efforts. Fortunately, demand flexibility initiatives like demand response, EV managed charging, and BYOD programs afford a non-wires alternative to costly infrastructure upgrades, simultaneously increasing grid resiliency while defraying the expensive peak demand energy purchases.
Environmental, Social, & Corporate Governance
These investments in infrastructure and artificial intelligence parallel environmental, social, and corporate governance (ESG) ratings, a fiscal guideline that promotes green energy and diversity initiatives alike. Although ESG ratings have entered the cultural conversation and fallen under political scrutiny, as a fiscal strategy, it considers the long game: a clean environment and happier workers are good for everyone.
– Larry Fink, CEO, BlackRock
In response, BlackRock CEO Larry Fink released a 2022 statement entitled “The Power of Capitalism.” In it he writes, “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper.”
While many U.S. businesses are deprioritizing ESG, the messaging remains the same: whatever you call it, investing in energy infrastructure and AI is crucial. These investments are mirrored by the Biden administration, which has repeatedly worked to usher in the energy transition through legislation like the Inflation Reduction Act or the Bipartisan Infrastructure Law. In fact, the Biden administration committed $2.2b in August 2024 to further protect the grid from extreme weather damage, while defraying high utility costs.
The Good News: More Behind-the-Meter DERs
These investments and laws are necessary for meeting the growing consumer push for distributed energy resources (DERs) like solar, battery storage, electric vehicles and EVSE chargers, and smart home devices like thermostats or water heaters. Currently, the DER market is expected to nearly double by 2027, a figure that promises to develop with time.
These behind-the-meter DER assets are controllable through the use of a Grid-Edge distributed energy resource management system (DERMS), which aggregates and dispatches devices to meet demand flexibility load management initiatives. By contrast, Grid DERMS aggregate utility-owned properties like solar or battery installations, assets that they can control and maintain. Still, with more DERs out there than ever finding a solution for the behind-the-meter DER assets found at the edge of the grid—in homes and businesses everywhere—is critical in meeting demand.
Wanted: More Virtual Power Plant Capacity
According to the Department of Energy, U.S. electric utilities need to increase virtual power plant capacity to between 80-160 GW. As of now, U.S. electricity providers yield between 30-60 GW of virtual power plant capacity, the majority of which is attributed to demand response. The DOE defines virtual power plants as any aggregation of power, the exact type granted through demand flexibility initiatives. These investments support these initiatives in obvious and subtle ways. Let’s look at how AI factors into energy management and meeting continued demand.
Topline Demand Control
As mentioned above, Grid DERMS aggregate utility-owned renewable energy assets. Because these assets are owned by the individual utility, they are often considered comparatively more reliable when compared to behind-the-meter DER assets. For example, renewable energy sources can be intermittent based on weather or cloud patterns, natural events, or customer participation.
Fortunately, Topline Demand Control solves this by combining Grid-Edge DERMS platforms with artificial intelligence, model predictive control, and forecasting software. Together, Topline Demand Control manages devices at the individual level, optimizing each device in real-time to respond to incoming system data. For grid operators, what this means is if they request a specific load capacity from their demand flexibility initiative, they enter the parameters, and Topline Demand Control reliably yields that exact preferred outcome every time.
Needed: Willing Participants
While customer participation is not directly tied to investments in AI and energy infrastructure, it is significant to the success of any demand flexibility program. In order for any of these initiatives to decrease high peak energy demand costs and strengthen grid resiliency, customers must both enroll and participate. The good news: most people want to engage in activities that mitigate the effects of climate change. For utilities, what this means is an increase in marketing materials, which should include:
- A multi-channel approach to marketing across a spectrum of mailers, websites, and social media platforms
- Creating a call center script to guide reps into educating on the value of demand flexibility
- Shaping the right incentives
Investing in Demand Flexibility Through Artificial Intelligence & Infrastructure Upgrades Conclusion
BlackRock and Microsoft don’t bet on investments that will fail and this is no different: energy infrastructure is crucial right now and AI can help. These investments aren’t just existentially necessary but represent an economic opportunity for utilities through demand flexibility. Is your utility ready?
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