Distributed energy resources: A new force in the industry

Distributed energy resources. The words are everywhere in the energy industry these days.

PJM’s Grid 20/20 in September will examine the role of distributed energy resources in PJM and as a force in the energy industry nationwide. Distributed energy resources were the focus of the General Session at the PJM Annual Meeting of Members in May. PJM CEO Andy Ott has said it’s important to learn about them and leverage that information for reliability.

But, what are they?

“Distributed energy resource” is a term for smaller power resources – such as storage, load reductions and advanced renewable technologies – that are connected to the electric distribution system and can provide services necessary to meet power system needs.

PJM hopes to gain greater visibility into distributed energy resources and microgrids in order to achieve more secure and cost-efficient dispatch, enable robust, liquid markets and enhance system reliability and resilience.

Some distributed energy resources are variable generation located close to consumers – a departure from the traditional model of generating electricity – that promise to change the way the grid operates in the future.

They include fossil and renewable energy technologies (such as photovoltaic arrays, wind turbines, microturbines, reciprocating engines, fuel cells, combustion turbines and steam turbines); energy storage devices (batteries and flywheels); controllable load reductions, and combined heat and power systems. The proliferation of microgrids is expected to be a key element in the growth of distributed energy.

Because distributed energy resource options are increasing in PJM, stakeholders are now considering the most effective and least-cost solution to integrate them into PJM markets and operations. This initiative includes identifying the inventory of behind-the-meter generation and how best to integrate those resources.

“We are creating a discussion around the need for business model and regulatory innovation and solutions,” said Andrew Levitt, senior market strategist – Emerging Markets. “We want to review and examine current integration and deployment challenges.

“Distributed energy resources such as storage and advanced renewable technologies can help facilitate the transition to a smarter grid.”

Aggregation is important for handling large numbers of smaller distributed energy resources.

At the wholesale energy pricing location level, it would allow for a level of communication, modeling and transparency that would enhance both system operations and planning.

PJM’s demand response program serves as an effective model for this type of aggregation.

“Integrating these resources into the grid has challenges,” Levitt said. “There are a number of factors – various generator sizes, connection points and electronic interfaces. It’s complex. However, PJM can leverage our experience aggregating and operating hundreds of distributed energy resources as demand response resources.

“The primary thing is keeping the system stable, especially in areas where there is relatively high deployment of power from these resources on existing distribution systems.”