Microgrid Overview

Subject: The Value of the Grid: DER Proliferation

Summary: Rapid changes within the electric industry have led to concerns that electric utilities are in peril of becoming obsolete. The rise of distributed energy resources (DERs), particularly rooftop solar generation or distributed generation (DG), as well as energy efficiency, behind-the-meter energy storage, and microgrids have caused declining or stagnant sales. Declining costs for these DER options promise to further erode sales. Both environmental concerns and economics are driving these changes. As public power business models adapt to change, the steps and considerations utilities take will help them to thrive in these new roles.

Author:  Paul Zummo, Director, Policy Research and Analysis American Public Power Association

Introduction

DERMS and VPPs Help Utilities Address the Many Challenges of Integrating DERs Big changes are afoot in how electricity is produced and managed. We’re seeing a shift away from centralized power plants to a new model that features distributed energy — renewable resources, combined heat and power (CHP) and battery storage. The drivers include renewable portfolio standards requiring utilities to invest in renewable energy; “prosumers” deciding they want to produce their own energy, go green and save money; and worries about climate change. But utilities and regulators are grappling with the challenges of integrating all this new distributed energy into the old-fashioned grid. Among the many prickly issues are outdated regulations that make it difficult to compensate producers for the energy they bring to the grid. Voltage excursions, brownouts and blackouts are also potential problems. One way for utilities to address the distributed energy resources challenge is by taking advantage of Distributed Energy Resource Management Systems (DERMS) and Virtual Power Plants (VPPs). This series identifies distributed energy resource (DER) challenges and explains how DERMS and VPPs address them.

Author: Energy Efficiency Markets LLC