Among the growing list of forces pushing microgrids and distributed energy resources (DER) forward in the U.S. is an expanding alignment between federal and state efforts to support such technologies, an expert panel said.
Current and former state and federal regulators say that federal, state and regional cooperation on DERs and microgrids will be necessary to move the technology forward. Central to the effort is Federal Energy Regulatory Commission Order No. 2222, a landmark federal rule approved by the five-member commission in September that required regional transmission organizations and independent system operators to revise their tariffs to ensure that its market rules facilitate the participation of distributed energy resource aggregations, which include microgrids.
Marissa Gillett, chair of the Connecticut Public Utilities Regulatory Authority, noted that one driver of microgrids and DER is the state’s goal of achieving 100-percent decarbonization of its electric grid by 2040. With more states implementing such standards, the impetus for microgrids will grow.
“I think the states are poised to take a really big role in creating more market forces for enabling distributed energy resources on our distribution grids right now,” Gillett said, making her remarks at a panel discussion at the Microgrid 2020 Global Conference held by Microgrid Knowledge. She sees movement towards microgrids and DER as being inspired by policies coming out of state regulatory commissions or energy commissions and said these agencies must work with regional transmission organizations to make sure the policies are being reflected in wholesale markets. She expects that by 2030 this policy front will create “well-defined markets for these items.”
State policies and regulatory support are going to be critical for microgrid growth and that is already being seen at the state level, according to Norman Bay, a former FERC member now with Willkie Farr & Gallagher. Order 2222 will remove barriers at the federal level and allow microgrid and DER technology to succeed on their own merits, he said. Removal of these barriers will allow innovation to proceed and “based on my own experience, I would never bet against the power of innovation.” A proper price signal is also needed in wholesale energy markets to create opportunities for the emerging technologies, he said.
“It’s very exciting to see state and federal policy working in tandem with respect to distributed energy resources,” Bay said.
Order 2222 will be an important step forward for microgrids, according to comments to FERC by the Microgrid Resources Coalition, which identifies microgrids as a type of aggregated DER. But contrary to standard DER such as rooftop solar that is not viewable or controllable by system operators, microgrids are controllable and responsive, as are demand response networks, some individual DER generation and electric storage resources.
Widespread deployment of DER such as solar can cause problems in grid operations—such as the “duck curve” in California—while responsive DER such as microgrids will instead enhance grid operation and reliability, the group said. They conclude that electric vehicles and energy storage centers such as microgrids will see their value optimized through participation in markets and can serve many purposes such as flexible capacity that will enhance reliability and resiliency of the grid.