Distributed Energy Resources Can Provide Benefits for Grid

Distributed energy resources (DERs) have the potential to produce new opportunities and benefits for the U.S. electrical grid, but still face some challenges. DERs are smaller-scale sources of energy located on or near the site of use, such as rooftop solar panels, battery storage units, and wind generating units.

The rapid expansion of these types of energy systems is helping to transform the energy landscape, but at the same time, state governments and grid operators must be prepared for how to incorporate these smaller resources into the electric grid.

These systems are often times intermittent in nature, as they only produce energy when the right conditions exist, and require immediate use of the energy generated. However, these systems can be equipped to feed the excess energy they generate back into the grid system. Allowing for the aggregation of these systems could benefit both owners of these systems and consumers, improving grid efficiency and supply stability by providing baseload power, which in turn could lower energy costs.

The Federal Energy Regulatory Commission in 2020 issued an order that allows DERs to participate alongside traditional resources in the regional transmission organizations. This will help provide a variety of benefits including: lower costs for consumers through enhanced competition, more grid flexibility and resilience, and more innovation within the electric power industry. States, including Pennsylvania, are now working to develop regulations to allow DERs to be recognized as participants in the PJM regional grid system.

The benefits of DERs can also include lower emissions and energy efficiency as homeowners receive credits for the power they provide to the grid. But to allow for interconnection, the DER system and existing grid must contain proper technology.

Researchers at both IBM and the Deloitte Research Center for Energy & Industrials are taking part in the cost-benefit analysis discussion of using of using DERs at varying scales, although maintaining the focus on the consumer view.

Challenges to the adoption of DERs include the upfront costs of solar and battery storage systems for homeowners. The electric grid also needs to be substantially upgraded to handle these new energy sources, as they were not built to withstand the dual-directional flow of electricity to and from the provider. Energy storage will also remain difficult to navigate to maintain a firm, 24/7 source of power during peak periods while renewables continue to become a larger piece of the energy mix.

Businesses, companies, and even research facilities are all joining the growing discussion of distributed energy resources. A greater understanding of DERs in the public eye can ensure that not just the buzzwords are being considered when debating an energy shift, but also a proper cost-benefit analysis is well thought out.