What Are Distributed Energy Resources? A Beginner’s Guide


Power has traditionally flowed in one direction, from generators over transmission lines to distribution utilities, and finally to consumers. That “one-way” power-flow paradigm is changing rapidly.  Smaller generation and energy storage devices, known as distributed energy resources, or DER, are serving a growing share of demand more locally, and increasingly feeding power back to the grid in a “two-way” fashion. PJM’s recently-published DER fact sheet provides a road map to the opportunities and challenges that DER present to the grid.

What Is Happening?  Why Do We Care?

The bulk electric power system in the United States continues to evolve. In addition to the growth of large, combined-cycle natural gas generation over the last decade, DER such as solar, batteries and small-scale natural gas generation are making up an increasing share of the generation needed to serve load in the PJM footprint. While DER are still a small but growing component of that mix, they are also the centerpiece of the clean and resilient energy future that many state lawmakers and their constituents are calling for.

PJM, which operates 84,236 miles of transmission lines on behalf of its members in 13 states and the District of Columbia, defines DER to be any generator or electric energy-storage resource connected to lower-voltage, local distribution lines. These sources may connect directly to low- or medium-voltage distribution lines, but often reside on the customer’s side of the electric meter.

While residential and other rooftop solar panels are the most visible and fastest-growing type of DER, lesser-known examples abound. These range from small-scale hydroelectric dams to biodigesters, which convert organic waste to natural gas that, in turn, fires a generator.

A convergence of factors drives the growth of DER in the PJM region. Technology costs are dropping. Customers are more interested in energy self-supply. Policies that provide a response to climate change and other environmental hazards continue to advance at the local, state, regional and federal levels.

Small But Growing

In all, DER technologies are estimated to total nearly 10,000 MW in the region served by PJM, compared with this year’s expected summer peak load of approximately 151,000 MW.  Much of the DER network is solar generation.  Of the top-10 solar states in the U.S., two are within PJM’s footprint. North Carolina is second and New Jersey is seventh.

Across the U.S., the grid’s future will be more diverse and decentralized, featuring solar photovoltaic systems, energy management systems, microgrids and demand response. DER are a part of that trend, and as it stands, DER technologies are expected to contribute close to 40,000 MW to the U.S. grid this year, a figure predicted to grow to 65,000 MW by 2024, according to the Federal Energy Regulatory Commission.

PJM studies all forms of DER and their impact on operations and transmission planning. Aspects for consideration include observability, working to identify and locate non-wholesale DER and making information available to PJM dispatchers. PJM is also required to provide open access to markets for these resources.

Fair and Open Access

As distributed energy resources proliferate, it falls to PJM, as operator of both the electrical grid and the wholesale electricity market, to ensure open, fair and reliable coordination with these newer and smaller resource types. Models for the bulk power system must account for all sources, despite the limited existing knowledge about decentralized “behind the meter” DER sources. This requires further research, information sharing and collaboration, particularly with operators of the distribution system. Look for more coverage in the coming months as Inside Lines tracks how PJM and its stakeholders are working to integrate DER into the future of the electrical grid.