1. Time and Locational Value of DER: Methods & Applications
Bruce Rogers Technical Executive
Electric Power Research Institute
NARUC Annual Meeting November 14, 2016

2. DER Proceedings are Proliferating in More Than 20 States

3. California and New York Taking Progressive Actions
“The more efficient system will be designed and operated to make optimal use of cleaner and more efficient generation technologies and will encourage substantial increases in deployment of these technologies...DER will become integral tools in the planning, management and operation of the electric system.
– NY REV, Feb 2015
“The IOUs are required to define locational benefits and optimal locations for DER moving the IOUs towards a more full integration of DER into their distribution system planning, operations and investment.
– CA PUC Code 769, Aug 2014

4. EPRI’s Study: Time and Locational Value of DER
Modeled Actual Systems
Con Edison Mesh Network and Southern California Edison Flexible Radial
Studied 10-year planning timeframe
Companion study by Sue Tierney, The Analysis Group
Two DER Interconnection Scenarios
DER only to meet all load growth
DER at customer discretion
Used EPRI’s Benefit-Cost Framework
Objective, reproducible, transparent
Assesses impacts of interconnected DER
Estimates value/cost to society
Asks whether DER can economically replace or avoid investments otherwise needed to accommodate growth

5. The Systems: Mesh Network and Flexible Radial Topologies
Mesh Network System (Con Edison)
Flexible Radial System
(SCE)
Two very different systems demonstrate the methodology.

6. EPRI’s Integrated Grid Benefit Cost Framework
Hosting
Energy
Capacity
Distribution System
Bulk System
Customer or Owner Cost/Benefits
Societal Costs/Benefits
Benefit-Cost
Scenario Definition
DER Adoption
Market Conditions
Resource Adequacy
Flexibility
Operational Practices & Simulation
Transmission Performance
Transmission Expansion
System Cost Changes
Reliability
System Assumptions
Study focuses on the elements of the distribution system.

7. System studies reveal the time and duration of system needs
Peak day load shape reveals time and duration of need
System annual load shape reveals peak day
Power flow studies reveal the time and size of needed upgrades
Traditional utility equipment or DER must be available, dependable, and durable.

8. Concept: Deferral of Distribution Upgrades with DER12 1
24 Hours kW
Traditional Approach
Capacity Expansion
Current Capacity
Forecasted Demand
Current Demand
Expand infrastructure to keep up with load growth

9. Concept: Deferral of Distribution Upgrades with DER12 1
24 Hours kW
Thousands of customer-sited solutions
DER Portfolio Approach
Capacity Expansion
Current Capacity
Forecasted Demand
Current Demand
A portfolio of DER technologies needed to shave peak.
Peak load duration matters.

10. Technology/ Market Potential
DER portfolio assembled based on technology, customer, and system load-curve characteristics
Technology/ Market Potential
Availability Factor
Capacity Coincidence
Con Edison Study Portfolio
SCE Study Portfolio
It takes a portfolio of DER to meet system and customer needs and to defer traditional assets cost-effectively.

11. Modeling reveals locational sensitivity in the local distribution system
Overloaded Transformer
Distance 
∆Flow
Neighboring transformer A
DER energy disperses from points A, B and C C B
Network System: Multi-directional Power Flows
In a network, the effectiveness of DER degrades with distance from the overload.

12. Modeling reveals locational sensitivity in the local distribution system
Transformer Overload – 63 kVA
Neighboring transformer
153 kW of DER needed if optimally located
340 kW of DER needed with 10 kW limitation
Case study example
Network System: Multi-directional Power Flows
DER location
In a network, DER must be tightly situated near the distribution violation to be cost effective.

13. Modeling reveals locational sensitivity in the local distribution system
DER energy directly reduces transformer flow whether at A, B, or C.
Overloaded Transformer A B C
Simple Radial System: Unidirectional Power Flows
In radial systems, DER located downstream from a capacity constraint can contribute directly to relieving it.

14. Modeling reveals locational sensitivity in the local distribution system
Overloaded Transformer
Flexible Radial System: Multi-directional Power Flows A B C
Overloaded Transformer
Neighboring transformer
50% more DER needed to provide the same capacity relief in both configurations
Case study example
Neighboring transformer A B C
Open
Closed
Reconfiguration provides operational flexibility and is a desirable feature of radial system design.

15. Economic Evaluation of Alternative Upgrade Plans
Modeling Assumptions and Outputs
Economic Analysis Outputs
Load Cost ($/kWhgrth)
Cost of serving load growth:
Energy cost (load/losses)
Capacity cost
Carbon cost
Bulk-system characteristics LMP & Carbon cost rates Capacity cost rates
Incremental Cost to Serve Growth in Load ($/kWhgrth)
Distribution-system/feeder Energy growth Load shape
Accom- modation ($/kWhgrth)
Cost of distribution upgrades:
Asset ownership costs (revenue requirements)
O&M costs
Cost and value of DER:
Equipment cost (Utility procurement)
Net energy value
Loss-reduction value
Carbon-reduction value
Avoided capacity value
One of:
10-year distribution upgrade plans to satisfy voltage, capacity, and protection constraints
10-year DER plans to satisfy voltage, capacity, and protection constraints
In this study we estimated the cost to serve load growth.

16. Example Waterfall Chart - Comparison of Costs for Con Edison Case Study w/No Headroom
Cost to Meet Load Growth – Traditional Utility Solution
Cost to Meet Load Growth – DER Solution No Headroom
DER solution net cost is slightly higher than traditional solution, but leaves the circuit with no headroom.

17. Summary of Economic Results from Case Studies
Con Edison Economic Results Summary
SCE Economic Results Summary
Studies illustrate the complexity of incorporating DER into the distribution planning process.

18. Conclusions from Study
Comprehensive, objective, and transparent methods are required for consistent and sensible results.
It takes a portfolio of DER to meet system and customer needs and defer traditional assets cost- effectively.
It is hard to generalize the net benefits of DER as an alternative to conventional grid investments.
Time and locational impacts are key determinants in valuing DER.

19. What Is Still Needed?
Planning processes and tools must transition to fully incorporate DER and their potential value.
Detailed engineering studies needed to capture the important nuances in how DER can be accommodated.
Grid modernization will also be a critical to sustain the safety and reliability of the distribution system, minimize overall system cost, and maximize benefits from DER.

20. Case Study Team
Con Edison: Matt Ketschke, Steve Wemple, Tom Mimnagh, Candice Tsay, Raghu Sudhakara, David Wang, Damian Sciano, Stuart Nachmias and others
SCE: Erik Takayesu, Caroline Choi, Heather Sanders, Dhaval, Dagli, Jeff Nelson, Mark Nelson, Robert Sherick and others
EPRI: Mark McGranaghan, Jeffrey Roark, Bernie Neenan, Jason Taylor, Jeff Smith, Tom Short, Roger Dugan, Bruce Rogers and others
Analysis Group: Susan Tierney

21. Together…Shaping the Future of Electricity
For more information contact:
Bruce Rogers, or
Deana Dennis,
Time and Locational Value of DER: Methods and Applications ( )