Distributed Energy Resources

Distributed energy resources (DERs) are resources that are sited close to the point of consumption

DERs can meet all or some of a customer’s energy needs with generation or by reducing or shifting demand. There is no common definition of DERs, but distributed renewable generation such as solar photovoltaics (PV), energy storage, combined heat and power (CHP), microgrids, electric vehicles, demand response, and energy efficiency are examples of resources that are typically considered DERs.

DERs can be deployed to meet public policy goals such as lowering greenhouse emissions, reducing peak demand, reducing customer electricity bills, or improving grid efficiency and operations. Utilities can also deploy or acquire geographically targeted and cost-effective DERs to delay offset the need for upgraded or new transmission and distribution system infrastructure. This strategy is known as a non-wires alternative (NWA) or non-wires solution (NWS) and is increasing in prevalence in the US. Energy efficiency has been an important resource within many NWA projects to date. Despite many benefits to customers, society, and utilities, the increasing penetration of DERs on the electric grid also creates new challenges for system planners and utilities who may not have visibility into where and when they are being deployed. Additionally, without supportive policies and regulations in place, such as revenue decoupling, utilities may be concerned about reduced revenue as DERs continue to come online.

Integrated energy efficiency and DERs

Program administrators have typically approached programs for energy efficiency and other DERs such as demand response and solar PV separately, although there has long been recognition that there are likely co-benefits and synergies amongst measures that reduce overall energy use and provide demand reduction at particular times, including peak. Rapid growth in new energy services and technologies such as information and communication technologies (ICT) have created opportunities for synergies and co-benefits across these resources. Even so, there are limited examples of programs that integrate energy efficiency with other DERs due to limited experience with evaluating integrated programs, difficulties in messaging and customer education, separate responsibilities, staff, and budgets within program administrators, and technological challenges for device grid integration and control.

There is increasing interest in creating integrated programs, but programs to date vary in the level of integration. For example, an integrated program may range from having stated goals of both energy and demand reductions, to cross-promoting programs, to administrative integration, or finally as a single program offering both energy efficiency and another DER solution. ACEEE’s initial research shows that integrated programs are able to achieve value streams for customers such as bill reductions, positive demand response payments and increased program satisfaction. At the utility level, these programs create benefits of increased participation and satisfaction, and have the potential to create system value such as increased grid reliability and increased availability of ancillary services.

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