A New Tool to Assess the Benefits and Costs of Distributed Energy Resources from the Electric Power Research Institute

If you've been following the solar news recently, you know there's a huge controversy brewing about the benefits and costs that distributed solar power systems bring to the electric grid. New protocols released last month by the Electric Power Research Institute (EPRI) could provide us with a way to help resolve it. EPRI, whose mission is to advance "safer, reliable, affordable and environmentally responsible electricity for society," says that the new protocols outlined in The Integrated Grid: A Benefit-Cost Framework seeks "to foster collaboration in five core efforts":

  • Grid modernization to support distributed energy resource (DER) integration
  • Strategies and tools for grid planning and operation
  • Interconnection rules and standards
  • Pilots to verify and refine DER integration protocols
  • Informing policy and regulatory discussions

A Timely Release

In several states, utilities have maintained that solar customers are shifting the cost of maintaining the grid onto non-solar customers. Solar advocates disagree, pointing to the benefits distributed solar offers not only to users who offset their own electric use and are able to sell excess power back to the grid, but also to grid users without solar. They remind us, in just one example of the clean technology's many benefits, that solar puts the most power onto the grid when demand is highest, meaning all customers pay less for their electricity.

NRDC has long maintained that utilities and regulatory agencies should fully evaluate the benefits and costs of distributed clean-energy resources (DERs) like solar before tinkering with rate changes and designs or with policies such as net metering that facilitate the use of DERs. Electric grids, after all, are complex entities that are both unique to their locations and also share qualities with other grids. There's not necessarily a one-size-fits-all answer to these issues.

Part of the problem in advancing this idea is that, to date, there's been little data to rely on. The state of California, through an ongoing regulatory proceeding on net metering, is expected to unload a trove of data in a few weeks. And a few entities, notably Austin Energy, the municipal utility in Austin, Texas, and state commissions in Minnesota and Nevada have set about evaluating solar's benefits and costs in a systematic fashion. But, otherwise, the information we need is mostly missing and the data that is available isn't collected in a uniform fashion that allows for apples-to-apples comparisons.

Volts, Bolts and Beyond

Like electric grids themselves, EPRI's Framework is highly technical. (Consider the 184-page document a kind of pleasure reading for grid operators, electrical engineers and policy wonks.) But, as the authors note in their introduction, "An Integrated Grid should make it possible for stakeholders to identify optimal architectures and the most promising configurations, recognizing that solutions vary with local circumstances, goals, and interconnections."

The details involve things like DERs' impacts on voltage regulation, protection coordination, energy losses, and reliability, along with similar impacts on things like feeder topology, short-circuit strength and X/R ratios. So, it's not for the uninitiated. But the Framework's strengths lie in these details and in its commitment to using a common evaluation methodology so that "utilities and other stakeholders can compare and contrast studies and articulate their findings in ways that make the results applicable and useful to others." Doing so, its authors say, "accelerates the development of a comprehensive understanding of the key drivers of the impacts of DER adoption at low and high levels, on distribution systems with different loads and designs, and in all electricity markets."

There is a limitation with the new EPRI framework, however, which the report authors acknowledge. The report does not account for important non-energy benefits such as public health improvements, job creation and the mitigation of global warming that derive from pollution-free DER like energy efficiency and renewable energy from wind and solar (not all DERs are pollution-free). While the accounting of these non-energy benefits may lie outside of the immediate dollars and cents fluctuations to customer bills, utility balance sheets and owners of DER systems they nonetheless impact our broader economy, environment, health and well-being. Measuring these non-energy benefits and costs may be a little less precise including longer time frames and using reasonable value approximations, but they certainly shouldn't be treated as zero. In order to form a more complete and accurate picture of the impacts of changing energy policy at any scale from the distributed energy resource level on up, we need to be mindful of both the energy and non-energy impacts that will result.

Building Constructive Partnerships

Not content to simply put their methodology into the public domain, EPRI is also creating an online community to enable ongoing information sharing, collaborative technology assessments and pilot programs that can document the benefits and costs of DERs.

Good data is key to our ability to understanding DERs' benefits and costs. EPRI should be commended for making it possible for utilities, regulators, environmentalists, consumer advocates and policymakers to work from a common framework and speak a common language, with The Integrated Grid.