ORIGINAL REPORTING: Getting The Value Of Distributed Resources Right

Come together? DER aggregation sparks more confusion than consensus in power sector; Utilities and DER providers have divergent opinions on how the aggregation of distributed resources will develop

Herman K. Trabish, July 7, 2016 (Utility Dive)

Editor’s note: The push to get DER valuation and grid management right is expected to be resolved over the next 3 years to 5 years.

Considered fringe technologies less than a decade ago, wind and solar energy are steadily becoming competitive with traditional generation, making them an increasingly attractive investment for power providers, even when compared with natural gas. But as quickly as that revolution in the power system became commonplace, another is picking up steam. The next big change, already in the works and raising urgent questions, is the aggregation of distributed energy resources (DERs) into a reliable grid resource. The growth of distributed generation is expected to top that of new central-station plants worldwide after 2018, according to a recent Navigant Consulting report.

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Providers say it is time to remove the obstacles to using software-managed fleets of distributed resources like rooftop solar and behind-the-meter battery storage to meet grid needs, just as a traditional generator would. Already, some pilot programs are underway in states like New York, California and Hawaii. With power sector leaders and regulators all working to form new market rules for the distributed energy future, a recent report of industry insiders from GTM Squared sheds light on four key areas of concern that need to be answered before aggregated DERs can become a broadly marketable product: The real value of DERs in electricity markets; Whether DERs managed by third parties present a threat to electric reliability; If and how utilities and build a new business model by competing in the DER marketplace; Whether third-party providers or utilities are better positioned to aggregate and market DER… click here for more

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