Recommendations on the role of DER on wholesale markets


The Smart Electric Power Alliance (SEPA) in partnership with Edison Electric Institute (EEI) issued a whitepaper on the integration of distributed energy resources into grid networks.

The paper analyses recommendations filed by over 100 stakeholders to address technical and operational issues regarding the connection of distributed energy resources on grid networks participating in whole or regional energy markets.

According to SEPA, the paper is centered around three technical and operational issues including eligibility requirements, metering and telemetry requirements and operational coordination among regional transmission operators/independent system operators, distributed energy resources integration and the distribution utility.

After analysing comments by energy stakeholders, SEPA and EEI found that:

  • The majority of energy stakeholders agree that the operations, reliability and safety of the distribution and transmission system are important factors when considering DER aggregation.
  • Energy stakeholders generally support allowing DER market participation via a third-party aggregator, and many commenters recognized that aggregation would allow these resources to overcome minimum size rules and other eligibility requirements for market participation.
  • Many commenters generally identified technical and operational challenges related to DER aggregations participating in wholesale markets, but commenters disagreed about the potential severity and difficulty of overcoming them.
  • Third-party aggregators voiced a common preference for consistent aggregation rules across the country to streamline market participation, while others asked for maximum flexibility to allow individual ISOs, RTOs, or electric.

In 2016, the Federal Energy Regulatory Commission announced that it is in the process of reviewing a policy which would require ISOs and RTOs to facilitate the participation of energy storage and other distributed energy resources in competitive wholesale markets.

This follows realisation that increased deployment of distributed energy resources would help utilities reduce consumer bills, sustain grid reliability and meet federal carbon emission reduction goals.

Regional markets providing consumers with affordable energy in the US and Canada include the California Independent System Operator’s Electric Reliability Council of Texas, SouthWest Power Pool, Midcontinental ISO, PJM, New York ISO and the New England ISO.