New tools and review processes will be needed to optimize distributed energy resources (DERs) for the electric grid of the future.
WASHINGTON, January 20, 2022 – National business association Advanced Energy Economy (AEE) and GridLab, a non-profit mission-driven electric grid consultancy group, organized an unprecedented coalition of energy utility companies, advanced energy companies, and large-scale energy buyers to publish a new report aimed at addressing key issues needed for successful implementation of Federal Energy Regulatory Commission (FERC) Order No. 2222. The new report is designed to act as a framework for state regulators to navigate key issues as utilities look to improve integration of distributed energy resources (DERs) into wholesale markets in the coming years.
The report lists key recommendations needed to help educate state commissioners, inform the FERC and Regional Transmission Operators/Independent System Operators, and support state policies that increase DER value. Active state commissioner engagement in addressing the opportunities and challenges ahead will be needed, as their decisions will impact utilization, safety, and reliability of the energy distribution system.
“Distributed energy resources should have an opportunity to participate in wholesale markets on a level playing field with other resources, and this report aims to outline how to best unlock the value of DERs for all parties,” said Lisa Frantzis, Senior Managing Director at AEE. “Distribution utilities should see FERC Order No. 2222 as an opportunity to derive value from DERs, while also giving system operators more flexibility and lowering costs for customers long-term,” added Frantzis.
“Successfully implementing Order 2222 will require unprecedented coordination and collaboration among distribution utilities, aggregators, system operators and regulators,” said Ric O’Connell, Executive Director at GridLab. “Representatives from distribution utilities and aggregators came together to tackle the technical challenges, demonstrating the importance of this effort as we work to create an electric grid of the future. DERs will be critical for our country to reach its climate goals and successful implementation of FERC’s 2222 Order will help us get there.”
“FERC Order No. 2222 will aid in the transition to the grid of the future, allowing the full potential of DERs to be realized in wholesale electric markets,” said Peter Dotson-Westphalen, Senior Director, Market Development at CPower. “Aggregation will offer resource developers, owners, operators and aggregators a clearer business case to maximize the flexibility and value of DERs, while supporting the needs of both the bulk power and distribution systems to operate safely, reliably and efficiently. Still, several areas key to the success of FERC Order No. 2222 fall under state, rather than federal, jurisdiction. A cleaner and more dependable energy future requires collaboration and state regulators can seize this opportunity to unlock benefits for customers, distribution utilities and the grid.”
“DTE appreciates the opportunity to participate in the AEE/GridLab study and to exchange ideas with a wide spectrum of industry stakeholders on the implementation of FERC Order 2222, said Yujia Zhou, Manager at DTE Energy. “Order 2222 has brought great opportunities as well as technical, regulatory and operational challenges. This report unpacks the gaps, complexities and nuances that the electric industry needs to understand in order to best serve our customer interests and to ensure the safe and reliable operations of the electric distribution grid. It formulates a common baseline and provides a set of tools such as walk-jog-run in the continued development and implementation of the Order.”