Opening the Distributed Energy Doors is a Win-Win
In November of last year, FERC issued a Notice of Proposed Rulemaking (NOPR) around electric storage resources. The goal was to better allow these distributed energy resources (DERs) to compete in the various wholesale markets. Per their November press release, FERC’s NOPR would require that RTOs/ISOs:
- Establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodate their participation in the organized wholesale electric markets
- Define distributed energy resource aggregators as a type of market participant that can participate in the organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation
Today, except for in a few markets, DERs are limited in the types of wholesale markets in which they can participate. For example, DERs can participate in demand response, but market barriers prevent their participation as a generator or in any other ancillary services market such as frequency regulation or synch reserves, even though technology has proven the ability of DERs to participate more broadly in these markets. Thus, we have FERC’s NOPR.
Since the release, there has been a great deal of discussion both for and against this NOPR. Some of those against this NOPR include generators, incumbent providers, states and even RTOs. Pushing back on this are members of the Advanced Energy Economy – a collective group of various technology companies ranging from software providers to battery storage and solar manufacturers – whose shared mission is “transforming public policy to enable rapid growth of advanced energy companies” in an effort to make “the global energy system more secure, clean and affordable.”
For those opposed to this NOPR, their opposition falls into one of three buckets:
- Reliability – The belief is that DERs are a threat to grid reliability. Furthermore, there is a push for a FERC technical conference on the subject, which would delay a ruling and implementation of the NOPR.
- Jurisdiction – Groups feel that this is a state-level issue and not a wholesale market discussion/issue.
- Costs – Some are stating that DERs will add incremental costs to consumers. They also state that it would be costly for public power authorities and electric cooperatives to implement. Finally, they are stating that RTOs would have the added cost of upgrading their systems to incorporate DERs as a new class of customers.
Enbala, as a member of AEE, couldn’t disagree more with the opposition points above. As one of the leading providers of software technology in the DERs space, we feel that providing access to multiple markets not only improves reliability of the grid but also drives down costs to both consumers and utilities/RTOs, especially when stacked values can be leveraged to drive down the time to payback on the investment and improve the return on investment (ROI). We highlighted the value of DERs when they have access to multiple wholesale market activities in our white paper from earlier this year entitled Stacked Value: Combine DERs and Goals to Dramatically Raise ROI.
CONCLUSION:
We will continue to lobby for this NOPR as it strikes to the core of our mission – creating a sustainable and balanced energy future. I encourage you to join us and our follow members of AEE as we fight to allow DERs more access for the benefit of both customers and the grid.