ORIGINAL REPORTING: The Essential But Elusive Locational Value Of DER

Locational value of DER is essential to grid planning. So why hasn't anyone found it? Policymakers want to identify the precise value of DER to their power systems, but the system may be changing too fast to make that possible right now.

Herman K. Trabish, Nov. 13, 2018 (Utility Dive)

Editor’s note: The search for a way to broadly value DER’s by location continues.

Accurately compensating all the values of generation and services provided by distributed energy resources (DER) is fundamental to utility planning and to the customer value proposition. To determine those values more precisely, policymakers are focusing on when and where DER deliver. There has been progress on the "when" and pilots are beginning to prove the potential of time varying rates. Progress on the "where" has been slower, but is now an emerging focus of policymakers. Work on DER locational value — previously limited to New York and California — is spreading. But it faces a challenge. The conditions of the distribution grid change quickly, Pacific Gas and Electric (PG&E) Director of Grid Planning, Grid Integration and Innovation Mark Esguerra told Utility Dive. That makes developing locational value challenging because the value of a location may change based on the grid's load demand.

click to enlarge

As distribution system planning and solar compensation policy efforts merge in grid modernization work, attention to locational value is growing, , according to the Q3 2018 solar policy quarterly from the North Carolina Clean Energy Technology Center (NCCETC). Pilots of DER as a non-wires alternative (NWA) to distribution system infrastructure upgrades are appearing and solicitations are emerging. Locational value is essential to grid planning so that utilities can use cost-effectively sited DER to defer capital expenditures for distribution system upgrades. Locational value is also expected to be an essential component in a successor DER compensation tariff that can replace retail rate net energy metering (NEM). But a way to precisely calculate locational value has not been found, and some say an estimated value may be more effective… click here for more

click to enlarge

Tweet