AI trends shaping distributed energy integration

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With the use of artificial intelligence (AI) and the rollout of distributed energy resources (DER) increasing within the utility sector, a new report by Guidehouse Insights analyses AI capabilities for enabling DER integration through 2030.

Guidehouse Insights forecasts the market for AI-enabled DER integration to record a compound annual growth rate (CAGR) of 10% through 2030. Revenue generation within the market is expected to increase from $204.2 million in 2021 to $481.8 million by 2030.

Hannah Davis, a senior research analyst with Guidehouse Insights, said: “The proliferation of advanced metering infrastructure (AMI), or smart meters, the influx of data for more advanced planning and operation of the grid, and the increasing capacity of DER requiring advanced communication networks and two-way power flows are reshaping the way the distribution grid operates.”

  • The penetration of distributed energy resources

Global utilities are increasing the rollout of DERs including solar energy, wind energy, energy storage, and electric vehicles to ensure secure energy supply whilst reducing greenhouse gas emissions.

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Guidehouse Insights predicts the global DER capacity to reach over 3.2TWh by 2030 as the race to decarbonisation and new business cases intensify and as more governments enact stricter climate mitigation policies.

However, the more DERs are connected with grids, the more complex energy networks are becoming for utilities to operate and manage. Mechanisms such as load and generation forecasting, demand response, power quality management, and voltage regulation, which have traditionally been used to manage DERs and the grid, are not sufficient, according to the study.

This is where intelligent and advanced technologies including AI will come into play since it enables utilities to leverage real-time data on grid infrastructure management, market pricing, supply, demand, load profiles, and weather forecasts. 

“AI techniques have been deployed in the energy industry for a variety of grid and market operations. One of the most compelling applications of AI in the energy industry is for the integration of DER,” according to a statement by Guidehouse Insights.

  • Adoption rates of smart meters and smart inverters

The digital transformation within the energy sector is expected to have a positive impact on the use of AI in simplifying and accelerating the integration of DERs with the grid, according to the study.

Up to 1.6 billion smart meters are expected to be brought online by 2030 and more demand-side devices including smart inverters and thermostats networked.

This will result in a dramatic increase in the amount of data utilities will have for processing. AI has the potential to optimise utilities’ acquisition, management, and processing of this data for the management and increased adoption of DERs and their connection with the grid, states the study.

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The rapid advancement of technologies and the increasing number of analytics vendors with software-as-a-service AI-enabled DER solutions are providing utilities with more options to efficiently integrate DERs with grid networks, according to the study.

Hannah, added: “AI for DER integration can drive benefits for utilities through better load and generation forecasting tools, grid optimisation and network planning tools, and power quality management.”

Regional markets

AI for DER integration annual revenue by region, World Markets: 2021-2030

The Asia Pacific region is expected to record the highest growth with a 14.7% CAGR during the forecast period, followed by the Middle East & Africa region and then Latin America.

However, factors including the cost associated with AI technologies for use in DER integration and the lack of advanced data collection and management practices amongst utilities are anticipated to continue hindering the market through 2030.

Find out more about the report.