the collaboration imperative in utility distribution

How the era of the digitally enabled grid is changing collaboration between utility distribution and regulators

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Platform access

provider

Distribution platform optimizer

Smart grid operator

As the traditional utility distribution model becomes increasingly strained, we see four business model choices

Decoupled integrated

utility

Enhanced visibility in a traditional model

Volume bias removal supports improved

optimization

Access and network services focused

Enhanced optimization over all timescales

Deploying technologies within the existing regulatory model as a smart grid operator is a business-critical first step. But until the regulatory model evolves to enable broader system optimization, opportunities for new services and higher value will remain limited.


The distribution platform optimizer—or DPO—is the model Accenture believes will dominate over time…

…involving managing and coordinating all elements end to end, to provide the optimal outcome for the whole system

But to realize the full potential of their transformation to a DPO, distribution utilities will need to more closely collaborate with regulators across many areas of their business


Our Digitally Enabled Grid research confirms that distribution utility executives see collaboration with regulators as imperative to a DPO world…

…particularly in areas such as creating new tariffs and pricing models, andmoving to an outcome-based, competitive revenue model

Which of the following regulatory changes do you believe will be necessary in the next 10 years (i.e., between now and 2025)?

New tariff/pricing modelOutcome-based

competitive revenue model

Yes

44%

Already in place

7%

No

9%

Yes

84%

No

41%

Alreadyin place

15%

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Collaboration will also be key in developing the mechanisms to effectively manage distributed energy resources……along with using demand response to optimize network efficiency and reliability


Greater role for the distribution business in the permitting and authorization of distributed energy resource connections

Mandate to use demand response to optimize the network/manage constraints

Locational pricing for new distributed generation (medium- or low-voltage connection)

Mandate to apply operational controls on third-party distributed generation and/or storage

Yes66%

Yes56%

Yes56%

Yes55%



And to incentivize the deployment of innovative network technologies that form the foundation of a digitally enabled grid…

…a key requirement for playing in the distribution space, whether as a DPO or one of the other models.


Incentives for the deployment of innovative technologies in the network

Yes64%



These new network optimization responsibilities will form the basis for the next generation of services provided by the DPOs …

…forming the basis for a new generation of distribution optimization services provided by the DPOs of the future.

Do you expect to be able to purchase energy or ancillary services from distributed generation, storage, demand-response providers or electric vehicle owners within the next 10 years? (i.e., between now and 2025)?

Global

Europe

Alreadypurchased

these

15%

North America

79%

12%9%

44%

16%

40%


No20%

Yes65%


And most utility executives expect a blended market model to emerge within 10 years…

…triggering a move toward a greater role for a new market model based on incentives and competitive markets

Which of the following market model approaches will form the basis for new distribution optimization services within the next 10 years? (i.e., between now and 2025)?

Global

Europe North America

20%


Regulated incentivemechanisms

16%

A blend of regulated incentivemechanisms and competitive

market approaches

68%

20%

60%

7%

86%

7%

Competitive market

approaches

16%

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About AccentureAccenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 384,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

About Accenture’s Digitally Enabled Grid research programAccenture’s Digitally Enabled Grid program provides actionable insights and recommendations around the challenges and opportunities utilities face along the path to a smarter grid. Drawing upon primary research insights from utilities executives around the world as well as Accenture analysis, The Digitally Enabled Grid examines how utilities executives expect smart grid technologies and solutions to contribute to their future networks. Learn more about The Digitally Enabled Grid

Copyright 2016 @ Accenture. All rights reserved. Proprietary and Confidential of Accenture. Accenture, its Logo and High Performance Delivered are trademarks of Accenture.

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