The next phase of a reliable and clean energy mix will center on deploying more distributed energy resources (DERs) and using them efficiently.

DERs have become increasingly prevalent, largely due to available market revenue streams, opportunities for demand charge mitigation, falling hardware prices for storage and renewable generation and deployment incentives like those in the Inflation Reduction Act. However, up until now, DERs have been mostly used through strategies centered solely on either tariff-based cost avoidance or confined to limited grid services program participation.

DER project owners and operators that only focus on cost avoidance or just participate in capacity programs, which require load reduction commitments ahead of time, often leave value on the table. To unlock the full value of DERs, owners and operators must balance priorities and make decisions based on changes in conditions like asset availability and market prices for energy resources. Only then will DERs fully contribute to a Customer-Powered Grid™ that enables a flexible, clean and dependable energy future.

Common Hurdles to Maximizing DER Value 

Maximizing DER value requires a comprehensive strategy. If you do not earn as much grid services revenue as possible and achieve the on-bill savings that you could, your DER strategy may not be working for one or more of the following reasons.

1. The strategy doesn’t consider all DERs.

DERs are any asset that consumes, generates or stores electricity. Or, to put it more simply: If it can reduce demand “behind the meter,” it can be considered and included in your DER strategy. These can be generation assets like generators, solar, co-gens and storage, but can also include energy curtailment and even energy efficiency.

The supply of flexible DERs, including load curtailment, onsite storage, electric vehicle (EV) fleets and other resources, is set for massive growth because the grid needs more flexibility to avoid failures caused by an aging infrastructure and the rising penetration of intermittent, renewable generation.

DERs that can be enrolled in demand response (DR) programs with short lead times, called on frequently, and be highly automated are particularly valuable. DR is the largest DER available in the market, and you don’t need anything other than the flexibility to curtail load to benefit from it.

As the need for flexibility increases even further, and existing and new DERs are incentivized to participate, including all your DERs in your strategy will become ever more important. Accounting for all your DERs is crucial because the more flexibility they collectively provide, the more valuable they are to the grid.

2. Underlying goals and the programs that will help achieve them haven’t been identified.

Unlocking latent DER value often begins with determining your goals. For example:

• • Are you pursuing all available financial benefits? Such as on-bill savings, grid service revenues and incentives? Optimizing returns requires considering all simultaneously.
  • How important is resiliency? Do you want to avoid business interruptions and associated revenue losses? Do you need back-up power? And, if so, what’s your non-emergency strategy for these assets? You may be able to earn revenue by supplying flexible capacity to the grid or to save money by using on-site generation and/or storage assets to reduce demand.
  • How can your DERs support your organizational objectives for sustainability? Customers and partners increasingly want to do business with organizations that share their concerns about helping the environment. You may also have to comply with regulations like limits on carbon emissions.

The best strategy for your facility will accomplish all your goals within a comprehensive framework of programs.

3. There is not an efficient plan for implementing DERs.

Unlocking the maximum earning potential of a suite of energy assets in complex markets requires creativity, focus and sophistication. Multiple DER projects, implementers and consultants can result in conflicting strategies.

Unfortunately, however, when it comes to problems that owners and operators face in optimizing their DERs, most solutions fall short in one or more areas. They:

• • Solve for grid services or on-bill savings – but not both.
  • Support only one type of DER asset – not multiple.
  • Depend on manual workflows and processes – instead of automation.

If a solution doesn’t solve for both grid services and on-bill savings, support multiple types of DERs and also automate workflows and processes, then your DER strategy doesn’t work. Therefore, you do not maximize the return on investment (ROI) in your DERs.

A Single Solution for DER Optimization

However, optimizing your DERs does not have to be complex. CPower’s EnerWise® Site Optimization solution can help you fully unlock the combined value of grid-services revenue and on-bill savings – in a single solution.

In automatically identifying and executing the most lucrative energy management strategies across on-bill savings and grid services programs and the different types of DERs, EnerWise addresses all the challenges around the optimization of DERs. A virtual energy manager, it maximizes the financial return, resiliency and sustainability benefits of energy storage, onsite and renewable generation and other DERs.

For example, in terms of financial benefits, EnerWise can help you:

• • Easily estimate and deliver the value from DER projects.
  • Justify DER investments and generate forecasted revenue and projected savings.
  • Shorten your DER project’s ROI horizon and maximize the financial return.

It also offers resiliency benefits such as:

• • Avoiding business interruptions by ensuring that back-up power is available.
  • Optimizing DERs’ usage according to resource and regulatory constraints.
  • Leveraging automated scheduling technology to manage your resources 24 hours a day.

And, when it comes to sustainability, EnerWise can:

• • Support organizational sustainability goals.
  • Redirect carbon-free power to help grid operators reduce reliance on fossil fuel resources.
  • Enable the transition to a cleaner and more reliable grid.

EnerWise has been named a finalist in the prestigious 2023 Edison Awards due to the energy optimization technology’s ability to help DER owners and operators get the most out of their assets. It is being honored in the Innovative Solutions and Services category for simplifying the approach to participation in multiple energy-market and utility programs.

Through its dynamic hourly scheduling customized for each site, EnerWise ensures each DER is allocated to the most lucrative available programs on an hourly basis, with one site averaging a 54% increase in grid revenues. It has expanded to 40 new sites across PJM and recently launched in ISO-New England.

EnerWise has drawn strong interest from DER owners and operators across crypto mining, government, education, manufacturing, retail and other commercial sectors who want to gain access to new value streams from their DERs.

If you would like to learn more about EnerWise or other ways to optimize your energy assets, call us at 844-276-9371 or visit CPowerEnergy.com/contact to find out how we can help you create and implement a DER strategy that works.

CPower customers helped grid operators avoid blackouts by providing over 50 GWh of electricity reduction during Winter Storm Elliott. Customers responded to 197 unique dispatches across three demand response programs in PJM and ISO-NE alone, which together cover all or part of 19 states and Washington, D.C.

In quickly curtailing their loads, CPower customers helped the PJM and ISO-NE regions avoid grid failures as freezing weather caused widespread power outages elsewhere in the country over the two days before Christmas.

“This storm underscores the increasing frequency of significant extreme weather events (the fifth major winter event in the last 11 years) and underscores the need for the electric sector to change its planning scenarios and preparations for extreme events,” NERC President and CEO Jim Robb said, in announcing that FERC, NERC and NERC Regional Entities have launched a joint inquiry into the operations of the bulk power system during Winter Storm Elliott.

With extreme weather events occurring more often, in both winter and summer, regulators and grid operators increasingly look to customer DERs to keep the power on during times of high energy demand. CPower customers, for example, were dispatched a record 1,030 times in 2022.

Electricity Reduction was Key in Winter Storm Elliott Response

During Winter Storm Elliott, CPower customers responded to dispatched events in PJM’s Emergency Capacity and Synch Reserves DR programs as well as ISO-NE’s Active-Demand Capacity Reserves (ADCR) program. The PJM Emergency Capacity dispatches were the program’s first winter events since the 2014 Polar Vortex.

PJM dispatched roughly 4,000 MW of DR on Dec. 23 and another 7,000 MW on Dec. 24 as capacity dropped and demand rose. Power demand rose to a peak of 135,000 MW on the evening of Dec. 23 while forced outages reached as high as 34,500 MW. Demand then remained high overnight, thereby preventing some power plants from replenishing their fuel supplies. By the time the morning peak came on Dec. 24, which was the coldest day of the Christmas weekend, PJM was missing approximately 57,000 MW of its generation flee due to winter storm challenges.

Similarly, unexpected generator outages and reductions and lower-than-expected imports led to a shortfall in operating reserves in ISO-NE, prompting the grid operator to dispatch DR twice as part of its efforts to balance supply and demand and maintain reliability on the regional power system during the evening peak hours of Dec. 24. ISO-NE declared a capacity deficiency and implemented measures under Operating Procedure No. 4 (OP-4) after 2,150 MWs of resources scheduled to contribute power during the evening peak became unavailable. Measures included using reserve resources to balance supply and demand and requesting conservation at market participants’ facilities.

DER Participation Alleviates Grid Strain During Extreme Weather

Historically, grid operators have called upon customers for load relief in summer months when demand has typically been highest due to extreme heat. However, winter electricity demand has increased in recent years due to extreme cold and heating electrification. For example, industry leaders cited big growth in electric heat as a chief cause of blackouts during Winter Storm Elliott, noting that over the past decade the number of households heated with electricity had surged by about 20% in the hardest hit states of Tennessee, North Carolina and South Carolina.

With heat electrification expanding and severe cold becoming more common and spreading further across the country, customer DERs are important in providing load relief and preventing blackouts during extreme weather events year-round.

CPower is the national leader in unlocking the power of customer DERs, with 6.3 GW of capacity across more than 17,000 sites in the U.S, and its customers are vital in strengthening the grid where and when it’s needed the most, as evidenced by how they provided load relief and energy reduction during Winter Storm Elliott.

Furthermore, CPower has hosted a webinar to help businesses in PJM understand the increasing importance of DERs in providing grid resiliency during winter months and learn how they can get paid for providing load relief to the grid. To watch, please click here.

Dann Price

Dann has specialized in PJM Demand Response for more than 10 years. As CPower’s Executive Director of Market Development for the PJM market, he is responsible for keeping hundreds of customers with thousands of sites up-to-speed on market conditions, energy prices, program particulars, and regulatory issues in the ever-changing PJM demand response market.

Mike Hourihan

Mike is Market Development Director at CPower. He has extensive experience in analyzing and developing market rules in multiple energy markets across North America. His career has focused on advocating for demand side resources participation in the energy markets as a reliable low-cost option compared to traditional generation assets.