The Many Types of Distributed Energy Resources, Common and Obscure


As distributed energy resources stake a growing claim within the electric energy mix, PJM is working to make sure these resources can be effectively integrated into our markets, operations, and planning.

PJM defines distributed energy resources, also known as DER, as any generator or energy storage resource connected to lower-voltage local distribution lines and/or the customer’s side of the electric meter. Each of these is outside the transmission system controlled and operated by PJM, but is linked at the delivery level. DER can come from a wide variety of fuel sources and can range in capacity from a few kilowatts to 20 megawatts (20,000 KW) or more. One megawatt can power about 800 homes.

For PJM, DER falls into two categories – wholesale DER and non-wholesale DER. Although some DER participate in wholesale power markets like PJM’s (wholesale DER), most do not participate in wholesale markets (non-wholesale DER); instead, this type of DER reduces customer load or utility load. Non-wholesale DER isn’t visible to PJM the way most generators are.

What Is Wholesale DER?

While most DER do not participate in wholesale markets, wholesale DER are a significant and growing category of resources in PJM.

Although wholesale DER are connected to the power grid at local distribution voltages, these resources offer into PJM’s capacity, energy and/or ancillary services markets just like large power plants do. PJM currently has over 2,000 MW of these resources that participate in wholesale markets. Most of that comes direct from larger (2–20 MW) resources (largely solar, but also other fuel types), and the other half comes from DER that reduce load as a form of demand response. These resources are often physically co-located with end-use customers, and can be connected to the grid using customer wiring.

Wholesale DER in PJM fuel type.

Some examples of wholesale DER generators in PJM:

  1. The Jersey-Atlantic Wind Farm powers the Atlantic County Utilities Authority wastewater treatment plant in Atlantic City, NJ, and sells its excess power to the grid.
  2. Hopewell Valley Regional School District and Public Service Electric & Gas in New Jersey collaborated to pilot a solar and storage project at Hopewell Valley Central High School that participates in PJM’s Regulation Market.
  3. A dam in Western Pennsylvania, built for flood control purposes in 1941, was recently outfitted with turbines to generate electricity, both locally and to serve the larger grid.
  4. Landfills throughout the PJM footprint capture methane generated from decomposing waste and use it to generate electricity for the grid.

DER as Demand Response

Demand response is usually associated with customers controlling their electricity usage in response to prices or directions from the grid operator, in this case PJM.

When the time comes for customers to respond, they change the thermostats in their offices or homes, adjust industrial processes or find other ways to reduce their energy consumption. DER-driven demand response is a bit different.

These participants have generation on-site that allows them to pull less power from the grid (bring-your-own electricity, if you will). Because this switch happens on the customer’s side of the meter, to PJM it still looks like a reduction in load. Therefore, they can participate in the wholesale market as demand response.

What Is Non-Wholesale DER?

Non-wholesale DER is similar to demand response DER and some PJM generation in that it is situated on the customer side of the meter, but doesn’t participate in any of PJM’s markets. It remains entirely accounted for by the local utility and the customer — PJM can’t really see when it is or is not available.

These resources fall into a various categories: net metered rooftop solar, municipal generators, generators at industrial facilities and generators of all kinds that sell directly to distribution utilities, often under avoided cost rates set by state and local regulators pursuant to the Public Utilities Regulatory Policies Act (PURPA). DER of these types generally have the option of participating in wholesale markets, but instead choose to be non-wholesale DER.

Net-metered rooftop solar is a growing resource and popular subject; more on that later. So, let’s talk about a few of the other types of non-wholesale DER.

Municipal DER

Municipal utilities can run generators – using a variety of fuels, from natural gas to hydroelectric power — within their service areas to reduce their customers’ load on the overall system when electricity use peaks.

Process DER

Manufacturers and industrial facilities often create excess heat, steam and/or other byproducts as part of their manufacturing processes. These excess resources can then be used to provide electricity generation at their facilities, which is known as co-generation.

Paper mills can burn black liquor (a paper-manufacturing byproduct) to generate electricity for their own operations or to feed back into the system.

Agricultural facilities can also harness the natural digestive processes of their livestock as a way to generate electricity. They do this through machines called biodigesters, which use bacteria to process organic waste and produce a biogas, usually methane, which can then be stored and used to fuel electricity generation.

Storage and Resilience DER

Electric utilities may have additional generation or storage on standby at the distribution level as an emergency backup. For example, American Electric Power uses a 2 MW battery unit in Bluffton, Ohio, to provide emergency backup power for up to six hours.

Microgrids are purpose-built DER that can provide resilience to hospitals, military bases or local communities. ComEd announced in April that its Bronzeville Community Microgrid in Northern Illinois was able to successfully keep power flowing in the event of an emergency. The test demonstrated that the microgrid could provide power in “island mode” (disconnected from the bulk power grid) while drawing upon DER like energy storage and solar.

The Future of DER

There is no shortage of the kinds of DER that are out there. But the future of DER is largely tied to the proliferation of retail and rooftop solar. It’s gained enough traction already that PJM has had to adjust how it formulates its load forecasts, and is working to prepare for the coming wave of rooftop solar into the grid. We will look at that on Inside Lines next week.

Header photo: Jersey-Atlantic Wind Farm, source: Community Energy.