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Microgrid Knowledge: Why Regulators Should Grant DERs More Wholesale Market Access: Report

Posted by Keefe Borden on Sep 26, 2019

Microgrid Knowledge reported on AEE's recent DER Report with an in-depth summary of the benefits, case studies and observations by AEE's Jeff Dennis. Read excerpts below and the entire Microgrid Knowledge story here. 

If allowed to participate in wholesale markets, distributed energy resources (DERs) can improve the grid’s reliability and resilience and reduce its costs. But regulators are not giving these resources needed market access, says a new report. Published by Advanced Energy Economy (AEE), ”Putting Distributed Energy Resources to Work in Wholesale Electricity Markets,” calls for federal and state regulators to cooperate with wholesale market operators and utilities to ensure that DERs can participate in markets.

The issue dates back to November 2016 when the Federal Energy Regulatory Commission (FERC) issued a notice proposing the participation of DERs in wholesale markets (RM16-23). It has yet to issue a final order, but earlier this month requested additional information from regional grid operators and gave them 30 days to respond.

Currently, the participation of DERs in wholesale markets varies by region. In some cases, they are allowed, in others, they are explicitly prohibited. FERC’s next step is to take a look and issue a final ruling on market participation by DER aggregations.

“The timing is unclear,” said Jeff Dennis, managing director and general counsel for AEE, a public policy advocacy organization.

One of the biggest issues in the record is clarifying the extent of federal and state regulatory authority to allow DERs to participate.

In theory, this question was already established with FERC rule 841 and 841a, which told regional transmission organizations (RTOs) and independent system operators (ISOs) to account for distributed energy storage. Those rules were supported by a 2-1 FERC majority in February 2019 and again in May 2019.

For their part, the big utilities are almost uniformly opposed to the participation of DERs, Dennis said.

And regulators do not always grant DERs market participation even though many states have enacted policies to encourage the growth of DERs: lowering carbon intensity, improving system resilience and giving consumers more choices for energy.

If structured properly, DER participation in wholesale markets can benefit all participants in the electricity sector in several ways, among them...

Read the entire Microgrid Knowledge piece here. 

Topics: AEE In The News