ORIGINAL REPORTING: Have California's efforts to value distributed resources hit a roadblock?
Have California's efforts to value distributed resources hit a roadblock? Just about the only thing parties in the state's DER valuation working group can agree on is that the tool they developed is 'not yet ready'
Herman K. Trabish, March 21, 2017 (Utility Dive)
Editor’s note: It is becoming increasingly clear that finding the right way to integrate DER into the power system faces many economic and policy hurdles. Ironically, the technology is the easy part.
California’s landmark effort to value distributed energy resources by their location on the grid faces complexities. Stakeholders in the state’s locational net benefit analysis(LNBA) working group agreed that the valuation tool they have developed is “not yet ready” and “needs refinements.” The group was tasked with building a locational value tool to inform key proceedings in California’s effort to open its marketplace to distributed energy resources (DER). They say the tool’s avoided cost inputs are a simplified representation of utilities’ cost-benefit analyses and not an appropriate proxy to determine payments to DER. It is only a start toward valuing distribution system expenditure deferrals.
Stakeholders say the bigger value of DER in expenditures that are deferred is still too complicated to model, with too many places for errors. Regulators believe the tool is important because it shows what can and cannot yet be valued and what remains to be developed in order to proactively identify locational value of DER. Working group discussions were based on the visionary More than Smart document that initiated the California DER proceedings. But commission guidance is now needed to prioritize next steps because longer-term refinements of the tool and methodology are necessary. The Integration of Distributed Energy Resources (IDER) proceeding (R.14-10-003), the Distribution Resource Planning (DRP) proceeding (R.14-08-013), and the commission’s net energy metering (NEM) successor tariff decision (D.16-01-044) hinge on and inform this effort… click here for more
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