PUBLISHER: Guidehouse Insights | PRODUCT CODE: 1640751
PUBLISHER: Guidehouse Insights | PRODUCT CODE: 1640751
Policy is an important market driver for distributed energy resources (DER), small scale technologies that when added to the traditional grid physically or virtually can make it work more efficiently. As climate change accelerates, global energy demand rises, and oil and natural gas become scarcer, supplying electricity is increasingly difficult. Consumers using DER can expand the grid's capacity while lowering their costs, and sometimes, they can even sell energy back to the grid. Although integrating DER into the grid so that they are sustainable and beneficial to all stakeholders is challenging, policy and regulation can help integration by reducing the financial burden of implementation.
In the traditional market, operators set prices for each provider. Now, some countries have decentralized their energy markets so that larger companies can connect DER to the grid in larger capacities. While this practice creates pricing flexibility, the complexities of selling energy back to the grid create issues for utilities, governments, and private entities, so pricing can be a barrier to DER.