Rising demand for electricity due to EVs as well as other devices and shortages of additional capacity threaten electricity reliability across the United Stages. Utilities in Washington State and across the nation are developing and enabling Distributed Energy Resources (DER) to solve the issues. 

DER are electric generation units or other energy services that are located close to where electricity is used, such as homes or businesses. DER can include renewable energy sources like rooftop solar, as well as energy storage devices like batteries, and smart appliances that can interact with the grid to reduce or time energy consumption. 

The US Electricity Grid is Insufficient to Meet Rising Demand

The North American Electric Reliability Corp. recently warned that two-thirds of North America face the risk of electricity supply shortages, NERC observed, and, according to Utility Dive, power system operators are concerned that greenhouse gas emissions standards for power plants could reduce grid reliability. The result is that the US is facing an ongoing need to mitigate the risk of blackouts due to electricity supply shortages. 

While there is an enormous amount of generation capacity waiting to be installed, Lawrence Berkeley National Lab has calculated that 680 GW (gigawatts) of battery capacity and 82 GW of gas capacity was stuck in US transmission interconnection queues at the end of 2022. That’s nearly half the total installed capacity of 1,270 GW in the US. The problem, still according to Utility Dive, is that it will take a very long time for this capacity to receive approval to connect to the transmission system, .

A supplement to grid growth which could provide the needed capacity at a fraction of the cost of building new power plants is DER. Leveraging DER could roughly triple virtual power plant capacity by up to 160 GW by 2030, the Department of Energy estimated, and it could save about $10 billion a year in grid construction costs. This level of DER capacity could meet about 10-20 percent of peak demand. DOE expects DER additions from 2025 to 2030 to include up to 90 GWH from EV charging infrastructure, up to 540 GWH from EV batteries, up to 35 GW a year from distributed solar and fuel-based generators, and up to 24 GWh from batteries. DER may also cost 40 percent less for a utility than buying capacity from a utility-scale battery and 60 percent less than buying from a gas peaker plant.

Multiple Solutions

How the DER market delivers those resources is undergoing a transformation, according to consultancy Wood MacKenzie. Whereas distributed solar grew 130 percent over the past five years, the next five years will be a story of battery storage and EV charging infrastructure. The 262 GW of new DER and demand flexibility capacity (or DFC, the load a demand-based resource which can be shed when called upon) that is set to be installed from 2023 to 2027 will nearly match the 272 GW of utility-scale resources due to be put in place over the same period.

The International Energy Agency (IEA) similarly noted that a growing portion of electricity is produced by variable renewables. However, many of today’s grids were designed for the 20th-century, when the share of DER was small. Greater system flexibility is then needed to balance supply and demand consistently, since electricity no longer flows in only one direction from the grid to the consumer and consumers can now produce electricity for their own consumption or sell it on the market. Digital technologies such as network monitoring devices and smart meters can improve visibility for distribution grids, advanced inverters can enable consumers to control the power output of their distributed solar systems, and digital management systems can support aggregation of DERs.

DERs such as virtual power plants (VPP) can also be a powerful solution to resolve resource shortages, Utility Dive opined. VPPs are groupings of distributed resources such as energy storage, rooftop solar and EV chargers that can balance electricity loads and provide grid services like a power plant. Leveraging consumer adoption of flexible distributed energy resources such as smart thermostats, electric vehicles, home batteries and smart water heaters can provide high-value services to the power system. Infrequent adjustments to the temperature settings of a smart thermostat, for instance, can provide thousands of megawatts of peak.

Washington State has Requirements for DER

Washington has a Renewable Portfolio Standard that requires utilities to obtain 15% of their electricity from renewable sources by 2020 and has experienced several severe weather events that have caused power outages and damages to the grid infrastructure. DER can help and Washington State has already established a planning process for DER. RCW 19.280.10 states that any distributed energy resources planning process engaged by an electric utility in the state should identify the data gaps, provide a ten-year plan for distribution system investments and non-wire alternatives, include the distributed energy resources identified in the plan, and include discussions of cybersecurity and data privacy, lessons learned from the planning cycle, and process and data improvements planned for the next cycle.

Utilities in Washington have Programs Underway

Utilities in Washington State are already moving forward with planning or implementation for DER.

Puget Sound Energy and AutoGrid launched a virtual power plant (VPP) that they aim to grow to 100 MW by 2025 and to 15,000 MW by 2045, according to Utility Dive. The VPP will ultimately include five key elements - energy efficiency, demand response, distributed energy resources, energy storage and electric vehicles - that will be used as a single resource. Initially, PSE is using a rewards program to sign up residential customers with smart thermostats and heat pump water heaters. PSE expects to use the VPP when the grid is stressed on especially hot or cold days. AutoGrid chief revenue officer Scott McGaraghan said he expects VPPs will eventually move beyond residential demand response programs to tie together commercial and industrial building controls, water treatment plants, manufacturing facilities, and grid-scale assets such as front-of-meter batteries.

PacifiCorp is also looking at distributed generation resources through programs that promote efficient electricity use via load control, price response load shifting, energy efficiency, or behavioral change resulting from education and information. It studied more than 300 DER applications, which resulted in more than 29 MW of approved private generation. Customer benefits can include added distributed generation, demand response, and energy efficiency as well as avoiding high-voltage transmission upgrades in PacifiCorp’s Yakima and Walla Walla communities.

Speaking at the Solar Summit in October, Seattle City Light (SCL) DER Strategic Advisor Joelle Hammerstad said sources for its DER initiatives include solar panels, wind turbines, biomass generators, fuel cells, and geothermal. Solutions to pull from the grid include direct load control, managed EV charging, smart water heaters, smart thermostat, time-of-day (TOD) Rates and thermal storage. As one example of the plans underway, SCL said that it, EPRI and Community Roots Housing received a Department of Energy Connected Communities grant to retrofit affordable housing communities into grid-interactive efficient buildings (GEBs). This demonstration project will evaluate whether buildings can be used as a grid resource while lowering the energy burden for tenants, which is expected to add 30 percent energy savings through efficiency, flexibility, storage, and distributed generation.

In short

While there are indeed concerns about the capacity and reliability of the electricity grid in the United States, DER offers a solid alternative that can help tremendously to enhance the resilience and reliability of the electric grid.