Utilities and grid operators stressed the need for real-time information on distributed energy resources to a Federal Energy Regulatory Commission panel in Washington, D.C. on Wednesday. FERC organized the conference to gather information on the challenges of integrating DERs into the wholesale power market, which makes up about three-quarters of the country’s electricity supply.
“The worst thing that could happen for distribution companies is to not have visibility on…that distributed energy resource,” said Larry Bekkedahl, Portland General Electric’s vice president of Transmission and Distribution, speaking to a panel of 10 FERC representatives. “We need to know where it is, the size of it, and how it’s being operated on a real-time basis.”
Not having live data on the amount of electricity DERs are feeding into the grid can lead to unnecessarily high prices, because utilities may end up running power plants when the energy isn’t needed, explained Bekkedahl.
Other stakeholders were concerned that a grid operator and a utility might accidentally dispatch the same DERs at the same time, threatening reliability.
“Communication today with DER is really low-tech. It’s phone and it’s emails,” said Matthew Glasser, a director at Consolidated Edison.
Audrey Lee, vice president of Energy Services for Sunrun, said the company often gathers better data than distribution utilities do. She told the panel that Sunrun’s solar-plus-storage systems have revenue-grade meters that measure power output.
Sunrun doubles as a residential solar installer and third-party DER aggregator.
While smart technologies exist to measure DER output to the grid, the level of adoption isn’t where utilities and grid operators need it to be, said Doug Parker, a director at Southern California Edison.
“On the distributed system, we’re still at the early phases of starting to modernize the grid,” said Parker. “So you wouldn’t want to put rules out there that require a level of coordination that cannot be supported by actual operative data.”
California has been an early adopter of DER integration. State grid operator CAISO already allows DERs to play in wholesale markets, although the uptake has reportedly been light. Pacific Gas & Electric and CAISO also unveiled a project in December that allows DERs to stand in for transmission grid investments.
FERC passed a rule in February that requires each regional transmission organization (RTO) and independent system operator (ISO) to create rules for energy storage to participate in wholesale markets. The proposed rule originally included a section on how to address aggregated DERs, but the commission opted to postpone the decision until it gathered more information from stakeholders.
How FERC decides to solve the DER data problem is anyone’s guess.
Andrew Levitt, an emerging markets strategist for PJM, said federal regulators could mandate that RTOs and ISOs establish a process to acquire information on DERs. Then distribution utilities and DER owners would have to submit their data to grid operators using the new system.
“Then the question is: What if they don’t want to do that? What authority does FERC have over distribution customers’ data?” said Levitt. “In general, distribution and retail things are not FERC’s domain, and that’s why this is a question in people’s minds.”
DERs like rooftop solar, energy storage and demand response have been championed as a way to help utilities defer or replace costly grid infrastructure investments, and industry leaders echoed that sentiment on Wednesday.
“What potential reliability benefits or opportunities can DERs offer the bulk power system?” asked FERC representative Joe Baumann.
"A good example of a winning opportunity in Arizona is we’ve deployed an 8-megawatt battery, an 8-megawatt hour capacity battery, that actually deferred a capital investment of a reconductoring of a 21-kv power line in Punkin Center, about a $6 million project and it’s in service today,” replied Jacob Tetlow, vice president of transmission and distribution pperations for Arizona Public Service.
Bekkedahl said increased solar power on the grid in Oregon allowed Bonneville Power Administration to cancel a $1.2 billion transmission project.
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Utilities around the country are investing more in DERs, but some third-party aggregators have been wary of their entry. Sunrun’s Lee voiced concerns about utilities becoming gatekeepers to DER participation in wholesale markets, saying they could be motivated to distort prices.
“Utilities may also be incentivized to own their own DERs, which potentially could create a conflict of interest with customer-sited or customer-owned DERs in the same market,” she told the panel.
DER aggregators “just want to compete in the market,” said Katherine Hamilton, executive director of the Advanced Energy Management Alliance, during a break between sessions. “I think it’s solvable.”
Note: this story was updated to accurately reflect Jacob Tetlow's quote.