DER of our Dreams

New York State is making a concerted push to recognize, adapt to, and encourage a new era for the electric grid: the age of the Distributed Energy Resource (DER, sometimes pronounced 'durrh').

The core of this new policy is a plan and process by the state utility regulator (NY PSC) called Reforming the Energy Vision, or REV.

A driving theme in REV is to "animate markets", i.e. encourage broad-based participation in balancing electric supply and demand through many individuals and projects (i.e. DER), rather than trying to force specific, top-down solutions via regulated utility investment or prescribed state incentives.

Along these lines, REV leaves the definition of DER quite open-ended. A note near the beginning of the REV Order explains:

"DER" is used to describe a wide variety of distributed energy resources, including end-use energy efficiency, demand response, distributed storage, and distributed generation. DER will principally be located on customer premises, but may also be located on distribution system facilities. 

So DER means rooftop solar, and also ice thermal storage, and also LED retrofits; the PSC is not trying to define what one does or looks like.

At the same time, I believe there are clear signals from the building, grid, and societal level that indicate the desired characteristics of the Perfect DER. I put these in 4 buckets:. 

  1. Utilization: Reliably reduce System peak demand (see this post)
  2. Resiliency: Provide 6-24+ hours' emergency backup power
  3. Economy: Be cost-effective (profitable) and non-disruptive
  4. Environment: Cut greenhouse gas emissions and local pollutants

When you look at the list, it seems clear we will get there with a mix:

  1. Batteries and/or on-site generation for #1 and #2
  2. Solar, wind and efficiency to help achieve #3 and especially #4
  3. Policy/tariff reform to bring the right price signals to the right users

I'll get into greater detail here in 2 future notes.