Everything You Need to Know About New York’s New DER & Aggregation Participation Model

The New York Independent System Operator (NYISO)’s new DER & Aggregation Participation Model reflects how far distributed energy resources (DERs) have come as well as the potential they can unlock as the Empire State drives toward its Reforming the Energy Vision (REV) initiative for creating a more diversified grid by better integrating customers.

Not only has the state’s grid operator acknowledged the collective power of DERs aggregated into virtual power plants (VPPs), but it has also launched the country’s first program to integrate aggregations of DERs into wholesale markets in sync with an effort to create New York’s grid of the future.

As the first registered aggregator for the DER Model and a contributor to the state’s efforts to shape its future grid, CPower sees four key takeaways in how NYISO’s new program improves grid reliability.

NYISO’s DER Model:

1. Benefits commercial and industrial customers.

Commercial and industrial (C&I) customers that can quickly provide grid services can earn additional revenue and save more money by helping NYISO keep the grid balanced. Energy users with automated technology are particularly well positioned because NYISO incentivizes customers to respond to a request for help within minutes.

The DER Model provides market opportunities for C&I energy users by letting them access existing markets as if they were a power plant. For example, customers can access capacity, energy and ancillary service markets under the relevant rules for each. Most of these markets were previously available through other mechanisms, but not all. Until now, these users have had no opportunity to access NYISO’s attractive real-time energy markets. Under the DER Model, they will.

Customers participating in fast-acting demand response for the first time will do so under the new model while NYISO phases out its existing Demand Side Ancillary Service Program (DSASP) for demand response customers. NYISO offers a DER Onboarding Suite for customers interested in participating in the grid operator’s markets.

2. Differs from the DSASP program.

Customers now enrolled in DSASP can remain in the program until it sunsets on April 16, 2025. They will then have to provide grid services through the DER Model if they would like to participate in NYISO markets similarly to how they have done.

Unlike the DSASP program that it replaces for new customers, the DER Model does not confine customers to a single, economic-based demand response program. While DSASP gives energy users the opportunity to offer load reduction into New York’s electricity markets to meet reliability needs, the DER Model allows customers to provide an array of wholesale programs simultaneously.

3. Taps the power of VPPs.

This landmark program unlocks the full benefits of VPPs for the resiliency and reliability of the grid, while also creating new revenue opportunities for commercial and industrial energy users and DER owners and developers. DERs of at least 10 kW aggregated into VPPs of at least 100 kW can simultaneously provide wholesale services to the grid operator and retail services to utilities and load servers.

DER aggregations can include resources such as small-scale solar arrays, batteries and electric vehicles, per market rules approved by the Federal Energy Regulatory Commission (FERC). Curtailable load, or demand response, is the only type of DER that can be aggregated as a single resource and technology.

Leveraging the flexibility of such DERs is essential to achieving New York’s clean energy goals. In its DER Model announcement, NYISO forecasts distributed generation in the state to roughly double over the next three decades as the state strives to have 70% of its electricity generated by renewable resources by 2030 and achieve a 100% clean power grid by 2040. Also, per its REV goals, the state wants to reduce greenhouse gas emissions to 60% of their 1990 levels by 2030 and to just 20% by 2050.

4. Shapes the state’s future grid.

In what was likely a coincidence, New York’s Public Service Commission formally instituted a major, multi-year Grid of the Future proceeding  within days of FERC’s approval of the market rules for NYISO’S DER Model.

The Grid of the Future proceeding will dovetail with, and help build upon, the NYISO program by developing a grid flexibility study and plan outlining the current and future potential capabilities of flexible DERs across New York’s electric grid. The study will also identify near-term actions likely to increase the deployment and use of flexible resources and improve integration of flexible resources into grid planning and grid operations.

Just as we helped to drive the process that led to NYISO’S DER Model, CPower will actively participate in the Grid of the Future effort to unlock more opportunities for our customers while helping New York meet its flexibility goals.

Customers interested in earning grid services revenue and reducing energy costs by helping NYISO improve grid flexibility can contact CPower to learn more: cpowerenergy.com/contact/.

Aaron Breidenbaugh | Senior Director, Regulatory and Government Affairs, CPower