ScottMadden Partners with ACORE to Explore Utility Business Models
The American Council on Renewable Energy (ACORE) released a new report titled, “Evolving Business Models for Renewable Energy: 2014 Industry Review.” The member-authored publication explores key issues and provides recommendations related to evolving utility business models through the integration of renewable energy. A contribution from ScottMadden provides an overview of current utilities’ responses to distributed generation and a course of action for the future.
- While utility-scale renewable strategies can be similar to traditional utility-scale generation, the utility business model may face significant changes from customer-sited distributed resources, especially distributed solar PV
- Key drivers accelerating the pace of distributed generation include technology and distributed generation advances; public policy and regulatory support; and customer preferences
- Current utility activities occur in four distinct categorizes: (1) finance outside service territory; (2) own/operate outside service territory; (3) provide green options to customers; and (4) own/operate within territory
- After evaluating potential market size, a utility should renew the regulatory contract, market test or pilot alternative resources, define adjustments to the operating model, and define adjustments to the business model
- Other contributions to the report explored commercial and regulatory risks associated with distributed resources, advocated for utility ownership of distributed generation assets as a way to drive deeper penetration of the market, and examined the role of commercial energy users under changing utility business models
The ScottMadden analysis finds that despite some rhetoric to the contrary, utilities will continue to exist and play a vital role in providing valuable services to customers. Therefore, utilities must have room to become valuable partners to ensure that distributed resources become a long-term, positive enhancement of the electric grid.
This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.
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