IDC Energy Insights has released a new report, Business Strategy: Distribution Optimization Coming in Waves that reveals high interest by utility company executives in adopting new distribution optimization applications. Based on utility executive interviews, two applications that have the nearest term prospects for adoption are those for integrated voltage and var control (IVVC) and for fault location, isolation, and service restoration (FLISR). Additionally, distribution management systems (DMS) vendors were cited as the most trusted to provide the functionality.

IDC Energy Insights interviewed executives from utilities that have deployed, or are in the process of deploying, advanced metering infrastructure (AMI) and smart meters, to gauge their opinions on the economic and technical feasibility of distribution optimization applications, as well as affordability and adoption timing.

Respondents scored FLISR applications with the highest levels of technical feasibility as well as their highest level of interest. IVVC applications, for energy efficiency, scored the highest level of economic feasibility, rationalized by the ability to pay for the investments through cost savings realized through reduced manual field operations. Purchasing outlook scores implied planning and deployment of both types of applications would begin to take place in the 2012-2013 time frame.

The adoption of distribution optimization applications known as dynamic voltage optimization (DVO) and virtual power plant (VPP) were judged by the respondents as occurring further into the future. However, interest in these applications is not insignificant and they are being closely watched by utilities.

Distribution management systems – the organizational capabilities and technologies a utility uses to monitor, control, and optimize the distribution grid – are widely used by utilities. Factors such as distributed renewable generation, energy storage, and electric vehicles are increasing the complexity of the distribution environment and are necessitating more dynamic management of the distribution grid. Distribution optimization applications leverage smart device and equipment automation capabilities in the field and not only help utilities adapt to the impact of distributed resources but also provide a means to create power delivery efficiencies and reliability.

"Distributed renewable generation, energy storage, and electric vehicles increase network complexity, which will be adapted to, in part, through a redesign of the centralized command and control structure. Operators will need to shift from actively monitoring all distribution network activity to handling critical exceptions while relinquishing routine decision making to automated systems," said Marcus Torchia, IDC Energy Insights research manager, Intelligent Grid Strategies.