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Energy Policy Roundtable in the PJM Footprint: Distributed Energy Resources and Clean Energy

Posted on: November 22, 2016

Daymark Energy Advisors consultant Dimitri Kordonis recently attended a new regional forum on electricity and gas in the PJM Interconnection region, which is comprised of 13 states and the District of Columbia. PJM coordinates the movement of wholesale electricity and operates the electric transmission grid serving all or part of these regions.

The Sept. 28 forum, hosted by the Kleinman Center for Energy Policy at the University of Pennsylvania in Philadelphia, featured two panel discussions: one that analyzed new studies on distributed energy resources (DER) and the other on strategies for meeting states’ clean energy standards and benchmarks. From Kordonis' point of view, the following are some of the key takeaways from each panel.

The panel “Value of Distributed Energy Resources: New Major Studies” discussed the results of three new DER studies of significance: Massachusetts Institute of Technology’s “Utility of the Future,” Electric Power Research Institute’s “Time and Locational Value of DER” and “Developing Competitive Electricity Markets and Pricing Structures” from New York’s Reforming the Energy Vision initiative.

Key points in the panel discussion included:

  • The cost savings and capacity benefits provided by DER, in addition to the reliability and integration challenges posed, including accurate assessment of locational value.
  • How to efficiently integrate DERs into the competitive market to gain maximum impact and value.

MIT’s DER study determined that a cost-reflective system of prices and regulated charges, like tariffs or rates, would increase the value of DERs and unlock opportunities for DER adoption. When locational value is exhausted, the value of DERs can decline quickly.

NY REV’s examination of competing electricity markets and pricing cites efficiency, planning and uniform pricing as vital components in establishing the value of a DER, while EPRI’s study concludes that comprehensive, consistent and transparent DER methods are required for best results.

“Efficient use of distributed energy resources is dependent upon grid modernization, well-organized market integration, T&D planning and ingenuity in clean energy supply and delivery,” said Kordonis. “The location of the energy resource within the power system also has a substantive effect on the value of each DER. At minimum, flexible DER can provide services to fill flexibility gaps on the local and on the transmission level.”

In the forum’s second panel, “Future of Nuclear Power in the PJM Footprint,” the discussion centered on how the power industry can meet clean energy goals as mandated by government regulators. The panel examined in detail New York’s Clean Energy Standard (CES), which requires 50 percent of New York's electricity to come from renewable energy sources by 2030. In the CES standard’s initial phase, utilities and other energy suppliers must procure and phase in new renewable power resources starting with 26.31 percent of the state's total electricity load in 2017 and grow to 30.54 percent of the statewide total by 2021. Panelists discussed what role nuclear power could play in meeting these and other government benchmarks.

Connect with Dimitri Kordonis on LinkedIn or contact him here to continue the conversation.