PJM saddles up for new frontier of distributed energy resources

By Suzanne Daugherty, senior vice president, CFO and treasurer

Within the well-established grid of transmission lines, generators and local distribution companies, a new frontier is emerging. Figuratively, this frontier is being drawn outside of the lines.

Distributed energy resources – distributed generation and storage devices connected to state jurisdictional distribution systems – are the new frontier in the power industry. These resources include solar photovoltaics, combined heat and power or cogeneration systems, wind turbines, micro turbines, backup generators, micro grids and batteries. DER are capable of powering individual homes, buildings or neighborhoods outside of the traditional structure for delivering power.

How and where DER connect, what market rules and government policies guide it, how it affects consumers and its impact on reliability are the heart of industry discussions.

PJM recently hosted a Grid 20/20 symposium on DER that brought many experts and deployers of DER to panel discussions. We heard that DER present both challenges and opportunities and will be a component of grid modernization.

The role of the regional transmission organization and distribution companies on this new frontier is being defined. PJM will continue to assess the impact of DER on our core responsibilities. We have a major stake in the development of DER and defining roles. Our stake lies in ensuring the ongoing reliability and integrity of the grid as well as the ability to evolve our markets to accommodate industry evolution, including DER.

PJM has a solid track record of navigating new frontiers. Our capacity market, for example, which was among the first designed to assure capacity three years forward, has attracted more than 22,000 megawatts of new generation. Also, since its launch in 2007, the capacity market has attracted a diversity of resources such as demand response, energy efficiency and renewable energy.

When new technologies such as larger-scale storage became available that could respond more quickly to the frequency regulation signal than some traditional resources, we sought market rule changes to compensate them for that ability.

PJM has been a leader of change in our industry and doing so while keeping the lights on and markets fair. Any new frontier, such as DER, that potentially helps consumers or affects the reliability of the grid will be a place where PJM will be actively involved.