My great-grandmother was a quilter. She pieced together colorful fabric scraps to create mosaic patterns on each blanket. I remember her dismay one day after tacking a design together when she discovered an additional set of pieces that needed to be included. After a moment of reevaluation, she cut the freshly sewn threads, undoing all of her work, and created a new geometric design. By reconfiguring the pattern, she was able to integrate the extra shapes and create an even more elaborate yet functional fabric network.
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I mention this anecdote because of parallels with the energy industry as it finds ways to incorporate distributed energy resources into existing networks. As policymakers grapple with the question of how to pull together disparate sources of power and use them to support the grid, they will be forced to consider snipping vital, long-established threads. And they will be challenged to reconnect the pieces in new, innovative patterns. There is no simple solution. But the reconfiguration process could contribute added resiliency to the current grid architecture.
On November 17, 2016, in a Notice of Proposed Rulemaking (NOPR), the Federal Energy Regulatory Commission (FERC) announced its intention to modify regulations to support the integration of energy storage and distributed energy resources (DER) in the wholesale market. If approved, the changes would require regional transmission organizations (RTOs) and independent system operators (ISOs) to remove barriers inhibiting the participation of energy storage and distributed energy resources in competitive markets.
In the NOPR, FERC established that participating in wholesale markets is critical to the economic development and widespread deployment of DERs. However, it also underscored the fact that integrating DERs would require significant changes to the way that these systems are designed and operated.
Since the NOPR was first presented, more than a hundred stakeholders have offered their insights. The Smart Electric Power Alliance (SEPA) and Edison Electric Institute recently reviewed these comments in an effort to draw valuable conclusions. One thing that all parties agree on is the fact that more discussion between RTOs, ISOs, distribution companies, and providers of aggregated DER services is necessary.
In a press release, SEPA identified key takeaways from the study. The first and most fundamental is that the operations, reliability, and safety of the distribution and transmission systems are critical factors to consider as a part of DER aggregation. The second takeaway is that stakeholders, for the most part, support third-party DER aggregation in wholesale markets. And finally, the study revealed that there are a variety of fundamental technical and operational challenges to DER aggregation, many of which do not have existing solutions. Industry members agree that overcoming these obstacles will require a collaborative approach.
Although RTOs, ISOs, and distribution companies will certainly have their work cut out for them as they calculate, snip threads, and reassemble the pieces to integrate energy storage and DERs into the distribution system, some stakeholders believe that the reconfiguration could yield a stronger, more beautifully complex design.
What are your thoughts?