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Locational Value: A Key To Unlocking Grid Benefits of Ditributed Energy Resources

Blog Post
Valuation, Analysis, BCA   
Nexant’s work with the Smart Electric Power Alliance (SEPA) on our recent paper, “Addressing the Locational Valuation Challenge for Distributed Energy Resources,” was rooted in what both organizations saw as a key obstacle to utility integration of these distributed technologies on the grid.

Distributed energy resources (DERs) are at the center of a range of policy conversations across the country, propelled by the growing potential of these distributed technologies – such as solar, storage and demand response -- to shape energy and grid investments. Some of the more developed efforts aim to establish or unlock DER value through various combinations of markets and regulatory innovation. The key examples here are New York’s Renewing the Energy Vision (REV) proceeding, and the Distribution Resource Planning (DRP) and Integrated Distributed Energy Resources (IDER) proceedings in California

But in order to integrate DERs into distribution system planning, it is first necessary to value them against, or in comparison with, more traditional distribution resources. A common metric or approach is needed for assessing locational value – that is, the potential to defer traditional "wires" investments -- that various DERs provide, so their individual values can be stacked and combined. This metric must also be translatable in terms of the traditional distribution capacity investments that may be deferred or avoided.