Utilities face several scenarios of possible business models for utility electric systems in the future including:
- Business as usual: No transformational updates.
- Low-carbon, centralized generation: replacement of large, centralized, carbon-intensive generation with large, centralized low-carbon or no-carbon generation.
- Rapid growth of decentralized energy resources: non-dispatchable generation, distributed storage and energy efficiency become common and widely adopted.
- Interactivity of the grid and demand: high interactivity between flexible, integrated and optimized transmission and distribution, grid-level storage, dispatchable distributed energy resources, demand response, smart grid and consumer demand.
- Grid or load defection: improvements in storage, cost reduction in distributed generation, and high energy costs lead customer load or grid defection (i.e. customers defect from utilities and self-supply).
Utilities and policy makers must decide how to promote both utility-scale and distributed generation. The growth in distributed solar energy and the emergence of new technologies is changing electric utility planning and operations. Variable renewables are spreading throughout the US, as are distributed energy resources by customers, and increasing interactivity of the grid by creating linkages between distribution and transmission, and utilities and customers.