Can Distributed Energy Resources displace the need for a transmission project?
- Oct 23, 2020 4:16 pm GMTOct 21, 2020 11:51 am GMT
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With FERC Order 2222 on DER Aggregation, FERC Order 841 on Electric Storage Resources, and now a complaint at FERC by Earth Justice on behalf of Voltus, a commercial and industrial demand response aggregator - DERs and demand response are in focus.
The big question is, will DERs displace the need for a transmission project? The answer is, yes, of course. Though there are limited examples today.
For example, take this quote from the current CAISO CEO when he was BPA Administrator, “The Bonneville Power Administration will not build the I-5 Corridor Reinforcement Project, a proposed 80-mile, 500-kilovolt transmission line that would have stretched from Castle Rock to Troutdale, Oregon”
He is referring to a transmission project need that is addressed by non-wires alternatives including energy storage and electrical flow control devices.
Now, take the benefits of participating in PJM RTO. PJM claims the range is $3.2 billion-$4 billion. MISO claims $3.6 billion in benefits. Both RTOs have a "Value Proposition" on their website for additional details. The cost of MISO RTO is $300 million. The benefit to cost ratio for MISO is 12.
One can argue the DERs cost is lower than a transmission line. But T line proponents argue that, its a fixed asset with 40 year life span. Didn't MISO just gain FERC approval for a SATOA for the same 40 year Present Value Revenue Requirement, for an energy storage project?
I think as an industry we need to inform ourselves of DERs and their abilities to displace transmission lines. Because as we saw with the costs and benefits of RTOs, these financial numbers are huge. And ultimately customers pay the cost. So, we owe it to the customers to look at all alternatives to transmission solutions including DERs.