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When properly integrated with the electric power system, distributed energy resources (DER) have the potential to provide more value than when they are operated in standalone mode. Integration allows synergies between the grid and DER and can produce benefits for both utilities and DER operators.
For utilities, DER can improve grid power quality and reliability and provide a flexible alternative to central-station generation and distribution. For consumers, interconnection can lower energy costs and ensure a constant supply of quality power.
To learn more about the benefits of integration, see:
Grid Benefits
Although electric utilities are often cautious about interconnecting distributed energy resources (DER) with their electric power systems, they have much to gain by doing so. DER can provide a host of benefits to utilities and their electricity grids.
DER can serve not only to supplement but also to strengthen the electric power system. When properly integrated, DER can:
- Relieve constrained grids by providing additional capacity
DER can be sited on constrained portions of electric power systems to provide additional electricity sources and capacity. Such units can defer demand from the electric grid during periods of high demand or contribute additional power to the grid for the use of all consumers in constrained areas.
- Reduce electric line losses
The Energy Information Administration estimates that approximately 9% of the power produced at central generating plants is lost on transmission and distribution lines during delivery. DER, which are sited closer to the electric loads they serve, do not suffer loss to the same degree because the electricity they produce is not transmitted as far.
- Provide emergency power
DER can provide emergency power to the homes and businesses in which they are sited during periods of electric system outages. In some situations, DER also have the potential to support sections of electric power systems in islanded operation to provide emergency power to all electricity consumers.
- Provide ancillary energy services
DER can improve the qualities of the electricity distributed through the electric power system. For example, DER can improve voltage and frequency regulation. In addition, DER can provide contingency reserves and black-start capability.
- Provide a flexible and responsive power solution
Because DER are easier to site than large, central station electricity plants, they can be a valuable alternative for utilities. DER can be sited in areas with temporary need and relocated when necessary.
- Defer investment and expansion.
Utilities can use DER to extend the life of their existing electric power system. For example, DER are sometimes used to defer expansions to power lines and substations.
Locational Benefits
Distributed generation technologies such as internal combustion engines have long been used to provide onsite emergency and remote power. However, when distributed energy resources (DER) are integrated with the electric power system, they can do much more.
Interconnected DER have the potential to:
- Improve power quality
Distributed generation and energy storage technologies can be used to address power quality problems such as voltage sags and swells, power blips, and harmonic distortions. Such applications are becoming increasingly common as sensitive electronic equipment becomes more widely used.
- Ensure power reliability
For companies in industries such as cellular communications, airline reservations, credit cards, and brokerage, even short-term power outages can cost thousands or millions of dollars. Interconnected DER can provide ride-through and emergency power to avoid such costly interruptions.
- Provide lower-cost power
Consumers and businesses with interconnected onsite generation can choose their power source to minimize electricity costs. For example, DER owners may choose to self-supply electricity during on-peak hours when electricity is more expensive or during periods of high demand, when future power rates are determined. Alternatively, they may choose grid supply during off-peak hours, when centrally generated electricity is usually less expensive than distributed generation.
- Allow generators to sell electricity back to the grid.
Many states now allow small distributed generators to sell excess power back to the grid and utilities. By generating power in excess of their own needs, distributed power producers can offset some of their own electricity costs.
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