Full Title: The Value in Distributed Energy: It’s All About Location, Location, Location
Author(s): Steve Fine, Paul De Martini, Samir Succar, and Matt Robison
Publisher(s): ICF International
Publication Date: September 1, 2015
Full Text: Download Resource
Description (excerpt):
No topic has dominated the power conversation recently as much as the rise of distributed energy resources (DER)1, and for good reason. As DER assumes a larger role in how energy is generated, consumed, and managed, there are already effects being felt throughout the grid today, and not fully understood implications for distribution, transmission and generation system planning and operations, both now and into the future. The effects — and potential benefits — could be enormous. But such benefits do 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. That is why determining the true, locational net value of DER has become so important, both now and as the foundation for managing a transition to a high-DER future. Utilities and regulators can already use (and in states such as CA, HI and NY, are actively working towards developing) an accurate, location-based measure of DER value to make smarter investments, set rates to reflect more equitable value, and optimize programs for energy efficiency, demand response, and renewable and storage deployment.
The approaches used previously in many states for estimating the narrower value of solar (VOS) are now woefully insufficient: inconsistency and skewed assumptions led to wildly divergent estimates. Previous work using prescribed, top-down methods did not account for locational net value — but with DER, location matters — and analyses must now be applied across DER technologies with differing characteristics. Value of DER is now a far more technically-demanding and complex analysis.
In this paper, we describe how ICF has undertaken such an analysis for a California utility and how the findings can provide insights and contribute to improved planning and investment. In the future, we plan to look at how this analysis can be applied across the electric system to integrate other aspects of the grid into a more distributed future.