Missing links in the evolving distribution markets

Missing links in the evolving distribution markets
By Steve Fine

When the energy industry is in flux, ICF experts apply their hands-on market experience to unpack complex issues and help clients navigate disruptive change successfully. As utilities and other market players engage in discussions and planning around the value of distributed energy resources (DER) and potential market mechanisms to enable them, ICF is conducting webinars and publishing papers on a regular basis to share our analyses and contribute to the conversation.

In our last paper, The Value in Distributed Energy: It’s All About Location, Location, Location, we explored methods to fully measure the value of distributed energy resources (DER) for a “true” value that reflects net benefits and operational challenges. This paper focuses on DER value for the power system as opposed to the portion of total DER value realized by customers. We take a deep dive into the spectrum of market mechanisms and operational controls available to accommodate high levels of DER. We explore the evolutionary pathway distribution markets may take, and we identify the evolutionary sweet spot where optimal value can be derived.

Click Download to learn in detail why ICF sees distribution markets following a path that maximizes net value to all customers, starting from the largest and most tangible value potential, and over time adding incremental and more complex opportunities. Understanding and fully realizing the value of DER is becoming an increasingly important issue for utilities, regulators, and other energy industry leaders with growing pressure to integrate DER from declining costs, heightened customer adoption, and governmental policies.

Assessing and realizing the potential value of DER will require an evolution in distribution planning as well as significant investments in grid modernization. In our next paper, Enabling the Value of DER Through Grid Modernization, we will draw on our extensive experience supporting distribution system investment planning and related regulatory filing development to lay out the capabilities and systems required at the different stages of DER adoption and distribution market development addressed in this paper.

Meet the author
  1. Steve Fine, Vice President, Distributed Grid Strategy + ICF Climate Center Senior Fellow

    Steve brings over 30 years of experience working at the confluence of energy, environment, and economics to evaluate and design workable solutions to our biggest energy challenges. View bio

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