Keeping up with the influx of new information on distributed energy resources (DERs) can be daunting. DERs are physical and virtual assets that are deployed across the distribution grid, typically close to load, and usually behind the meter, which can be used individually or in aggregate to provide value to the grid, individual customers, or both. A particular industry interest seems to be centered on DERs — such as solar, storage, energy efficiency, and demand management — that can be aggregated to provide services to the electric grid.
The energy industry’s focus on DERs is a function of how important it’s become to understand the potential capabilities they have to offer. In 2015, U.S. electric utilities spent $103 billion in capital expenditures to maintain and upgrade the grid — and they now expect average annual spending of around $100 billion through 2018, even as growth in electricity demand slows.
These two trends combined could raise retail rates significantly for electricity customers, as much as 15% to 30% through 2030, according to one study. To modernize the grid for two-way energy flows and incorporate new, connected technologies, while maintaining minimal rate impacts, all available resources, including DERs, need to be put to best use.
To reach this goal, we need to start with a common base of foundational knowledge on DERs -- key articles and resources that are easily available to all stakeholders -- which is the purpose behind this piece.
We started from a set of basic, common understandings about DERs: that they can provide positive net value to the grid, such as avoided infrastructure investments, improved resilience and increased integration of clean energy. However, integration of these resources will require a new planning paradigm. Finally, the solutions for the challenges ahead will be rooted in information sharing, partnerships and collaboration.
Our goal here is not to forecast the future of DERs, but to provide, in effect, a “DER 101” syllabus that demonstrates the value of DERs and provides insights on:
- How different DER technologies can provide energy, capacity, and ancillary services for both the distribution and bulk power systems.
- How we can develop DER benefit-cost frameworks that offer a fuller, accurate accounting of the benefits and costs related to these services.
- What valuation options exist for each type of DER benefit and cost.
- What implications DERs may have for changes in planning, market design, operation and oversight.
The full blog provides basic, overview resources, followed by a more detailed set of reports — presented in matrix form — to allow for a deeper exploration of the myriad capabilities and grid services DERs can furnish. Together, these resources will help build a better understanding of key DER issues and opportunities.