From DERs to iDERs
- Dec 8, 2020 10:59 pm GMT
Distributed energy resources (DERs) have emerged as the latest craze in the power sector as it moves away from its historical centralized business paradigm. Broadly speaking, DERs consist of energy efficiency (EE), demand response (DR), distributed generation (DG), distributed storage (DS) plus efforts to monitor and manage all sorts of behind-the-meter (BTM) assets, be it electric vehicles (EVs) or smart thermostats that control HVAC systems. This, however, is decidedly old news. The latest buzzword is integrated DERs or iDERs, according to an insightful white paper by Peter Asmus and colleagues at the Guidehouse, formerly Navigant.
The white paper titled Integrated DERs: Orchestrating the grid’s last mile, spells out why the key operating word moving forward is the “i” in iDERs – both upstream with the utility and grid operations and downstream with customers’ behind-the-meter assets. It points out that, istributed energy resources (DERs) have emerged as the latest craze in the power sector as it moves away from its historical centralized business paradigm. Broadly speaking, DERs consist of energy efficiency (EE), demand response (DR), distributed generation (DG), distributed storage (DS) plus efforts to monitor and manage all sorts of behind-the-meter (BTM) assets, be it electric vehicles (EVs) or smart thermostats that control HVAC systems. This, however, is decidedly old news. The latest buzzword is integrated DERs or iDERs, according to an insightful white paper by Peter Asmus and colleagues at the Guidehouse, formerly Navigant.
“Navigating the energy transformation requires new approaches to integrating DER into the grid and onsite energy networks to bolster resiliency and foster sustainability. It also requires innovative business models that recognize previously hidden value for both end users and stakeholders across the broader energy system”
What will it take to achieve such an outcome?
“A fundamental rethink of strategy and planning as well as organization and system operations that embrace DER networks and their underlying technologies ….”
The result, it says, will be “a system better attuned to evolving demand and customer needs and more compatible with a rapidly changing policy and regulatory environment.”
The Guidehouse white paper, lays out “a vision and roadmap to greater realization of iDER, which describes a more dynamic and highly networked system of DER that can coordinate seamlessly with the bulk energy system.”
What’s the big fuss about the “i” in the iDERs? The answer is that the recent growth of DERs has been such that they can no longer be viewed as a sideshow or treated as an afterthought. DERs are moving mainstream and according to the white paper are dominating new additions/investments in networks globally as illustrated in the above visual as the electricity business is increasingly moving towards a decentralized model.
The Guidehouse white paper notes that the future is “very different from the world we live in today.” Take the case of New York, one of the states in the vanguard of the iDER revolution. It says that if the current DER and renewable energy deployment trends continue, by 2040 the Empire State could have.
- 100,000 buildings offering flexible DR loads
- 5,000 MW of distributed energy storage devices deployed behind and in front of the meter
- 9,000 MW of offshore wind
- 250,000 solar plus storage systems installed at residences; and
- 100,000 EVs plugged into distribution networks
In such a future, DERs clearly play a much more prominent role and have to be intimately integrated with the utility’s upstream assets as well as the operations of the grid. Otherwise, they will be sub-optimally utilized and their value marginally captured and monetized. For DER to work seamlessly and optimally, as illustrated in the accompanying visual, the “utility operations” have to seamlessly interface with “customer assets” at the “grid’s edge.”
The white paper argues that the key to successful iDERs is to harness the full value of DERs.
“The value of DER assets is typically measured by the capital expense attached to them purchase. However, the value of each asset to the commonly shared power grid grows exponentially if integrated with other DER assets in a smart and nimble way, even as the capital cost declines. One could argue this is the best of both worlds: lower cost but better value.”
The Guidehouse’s vision of the DERs is broad and envisions a host of players, potentially collaborating and/or competing, for a slice of the growing DER pie. This is beginning to happen as new players are joining the usual suspects in what is likely to remain a highly fragmented space. As illustrated in the visual on left, many players are beginning to appear in what promises to lead to significant disruptions in the way energy services will be delivered and paid for in a future enabled by the rapid proliferation of smart connected devices and the connectivity of behind-the-meter assets enabled by the cloud.
Much is expected to happen as more emphasis is placed on managing the many useful attributes of behind-the-meter assets in the next decade or so. The Guidehouse is spot on in stating that the time has arrived to integrate the DERs into the upstream operations of the utility industry, and in doing so, extract more value from such investments. n