Distributed Energy Resources (DER) is causing unprecedented transformation in the energy market. Increasing numbers of market players are trying to understand the potential opportunities and systemic implications of DER’s expanding role.
We are already feeling effects of DER throughout the grid, and utilities and regulators recognize that there are potentially beneficial and detrimental implications for distribution, transmission, and generation system operations and planning.
The effects, and potential benefits, could be enormous, but they will not accrue equally in all places, across all technologies, or to all users, nor do they always stack up against integration costs as a net positive. With DER, location matters and value analyses must be applied across technologies with differing characteristics.
Though far more technically demanding than previous approaches, we cannot overstate the importance of determining the true, locational net value of DER, both now and as the foundation for managing a transition to a high-DER future. A comprehensive, consistent framework is required to appropriately weighs benefits and costs as the basis for rate design, programs, integrated system planning and platforms, and market mechanisms for sourcing DER services.
Getting it wrong could leave a utility or an entire state misaligned, with inefficient capital allocation, misaligned tariffs that benefit some customers over others, and increased costs to maintain reliability. Getting it right, in a consistent way, unlocks opportunities for customers, market participants, and utilities to optimize products and services, create new markets, and ultimately grow revenue sustainably.
For decades, ICF has helped clients navigate change across every sub-sector of the energy market, and our team is ready to help de-mystify DER and its impact. For more details about valuing DER and how the results will contribute to improved planning and investment, download ICF’s recent white paper: The Value in Distributed Energy--It's All About Location, Location, Location.