Integration Of Distributed Resources – Stacking Up Benefits And Costs

A new four-part methodology provides a consistent approach to assess the benefits and costs of integration of distributed energy resources.
Published: Thu 19 Feb 2015

Distributed energy resources (DERs), such as solar, wind, microgrids and storage, are increasingly being deployed to improve the reliability and resiliency of the grid. However, these resources are not yet fully integrated into the planning and operational strategies of the grid. Given that DERs interact in multiple ways with the grid, an integrated approach to grid development and management is needed in order to accommodate the anticipated growth of these technologies throughout all areas of the network. [Engerati-How to Integrate Distributed Energy Resources]

As part of its Integrated Grid initiative, the Electric Power Research Institute (EPRI) has developed a framework to assess the benefits and costs of technologies and systems related to the integration of DERs. The four-part methodology is intended to provide a transparent and consistent approach to quantify the impacts of DERs on the interrelated distribution and bulk power systems, and monetize these impacts to inform decision-making.

“EPRI is working to develop a common tool set to inform operations, planning, policy, standards and interconnection rules,” says Dr Mike Howard, president and CEO of EPRI. “By applying insights from science, engineering and economics, we can take the grid from one of interconnected parts to one that fully and optimally integrates distributed and central energy resources. Ultimately, this will enable us to realize a new level of safe, reliable, affordable and environmentally responsible electricity.”

Integrated Grid framework

The methodology begins by specifying the ‘Core Assumptions’, i.e. market conditions, DER adoption, and scenario definitions. These data populate and parameterize the analyses conducted to identify and quantify the impacts of DERs on the distribution system and on the bulk power system.

A study of DER integration begins by identifying and quantifying the distribution system impacts attributed to interconnected DERs. This is accomplished by conducting hosting capacity studies that determine the level of DER interconnection that can be locally accommodated without impacting the quality of supply for the existing infrastructure. Subsequently, energy, capacity, and reliability analyses are undertaken to identify designs and approaches that take advantage of the DER benefits while avoiding adverse impacts.

The bulk power system focus begins with resource adequacy, making sure that sufficient resources are available to meet electricity demand. Next, transmission expansion studies determine whether the power generated can be delivered to the distribution system without a drop in service reliability (including the benefits and impacts of distributed resources). Additional analyses include transmission performance, system flexibility and operations practices and simulation.

Then in the Benefit-Cost step, the accumulated impacts are processed and measures of net benefits are constructed.

Benefits and costs

Many of the impacts identified in the distribution and bulk power system analyses are costs or costs saved – the former incurred to mitigate adverse impacts, and the latter those that would have otherwise been incurred but are avoided. These are aggregated categorically, making a distinction between benefits and costs. Other impacts define changes in the system that are tangible and should be identified and quantified but that are not readily monetized because they are not transacted in the electricity (or any) market. Emissions associated with electricity generation, changes in delivery reliability, and changes in the economy (such as employments and wages) are examples of externalities for which there are no market transactions to definitively set a value for their level.

From a societal perspective, as many benefits and costs as possible should be monetized so that the net benefits derived are all-inclusive to reflect the utility’s and its customers’ interests as well as those of all economic sectors and all citizens, EPRI recommends.

Pilot projects

EPRI regards the methodology as ready for widespread application, but also as a work in progress.

In order to provide a better understanding of the operational values, performance issues and economic benefits of grid integrated DER deployment, a series of pilot projects are proposed, targeting an array of DER configurations:

• Utility-scale PV, with and without storage

• Distributed storage (customer-side systems) operated in conjunction with intermittent DERs

• Microgrids serving local customers’ needs and as a system support asset

• EV charging infrastructure

• Customer-side technologies, such as PV (with and without storage) and devices used by customers to control when and how much electricity they use.

Further reading

EPRI: The Integrated Grid: A Benefit-Cost Framework

EPRI: The Integrated Grid