ORIGINAL REPORTING: Investments In Utility System Upgrades Stuck In Cost Cutting Paradox

High electricity rates impede crucial but costly technology investments to manage rising DER levels: Utilities; New system investments, made before levels become overwhelming, will realize distributed resources’ system

Editor’s note: Inflation and the accelerating need for system upgrades to integrate New Energy have only made this paradox a greater dilemma.

The clean energy transition makes the question of how distributed energy resources, or DERs, fit in the future energy mix particularly urgent, utilities and DER advocates agree.

The technical potential of DER like rooftop solar, batteries, electric vehicles, and flexible industrial and building loads like smart water heaters and heat pumps could “play a significant role” in a 100% clean energy mix, an August Department of Energy study found.

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With adequate “distribution system visibility and control” of DERs, they can “help protect system reliability and resiliency,” agreed Xcel Energy Colorado President Robert Kenney. But “the cost of new technologies to manage those resources threatens rate affordability and slows deployment because regulators and utilities face the responsibility to balance stakeholder concerns,” he added.

Integrating high DER penetrations into power system operations will ultimately require significant investments in technologies like Advanced Distribution Management Systems, or ADMS, and Distributed Energy Resource Management Systems, or DERMS, utility representatives and DER advocates acknowledged. The question is how and when those investments are made.

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Transportation and building electrification, constraints on bulk system resource delivery, and consumer demand “require addressing DER growth,” Generac VP, Markets and Programs, Josh Keeling, a former Portland General Electric executive, said. But a staged deployment of technologies to manage them “can reduce their costs and burdens and benefit customers and power systems over the long term,” he said.

A “national initiative” and stakeholder dialogue can build a framework for that staged DER integration to protect affordability and reliability for customers, according to recent papers from a group of DER analysts. But advocates underestimate the urgency of investments in distribution system situational awareness for managing DER and limitations of the nation’s divided regulatory jurisdictions to approve them, utilities said… click here for more

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