Integrated Distributed Energy Resource Pricing and Control

Abstract

U.S. policy is to allow owners of distributed resources to effectively and reliably provide their services at scale, and operate harmoniously on an interconnected distribution and transmission grid. Accordingly, regulation, new business models and technology advances over the past decade have led to significant growth rates in distributed energy resources including generation, responsive demand, energy conservation and customer adoption of industrial, commercial and residential energy management systems. The result is that several regions are reaching proposed capacity levels for distributed generation that exceed traditional operating and engineering practices for distribution systems. At the same time, policies advocating wholesale spot prices to customer devices (“prices to devices”) have not adequately considered distribution system reliability impacts or relationship to distributed generation. As such, it is also not clear that current market models or regulations are entirely adequate or appropriate for the several emerging hybrid regional markets, such as California, with millions of distributed energy resources envision by the year 2020.