Integrated DER Maturity Assessment, Part I of III

Why Prepare for Distributed Energy Resources?

Guidehouse’s forecasts show that distributed energy resources (DER) capacity is expected to grow almost 3 times faster than new central station generation over the next 5 years. Total DER capacity is expected to more than double by 2023. Meanwhile, North American utilities are at various stages of integrating distributed generation, demand response, energy efficiency, electric vehicles, microgrids, and energy storage. Many are unprepared for the dynamic impact these resources will have on current grid operations and their overall operations.

For utilities to take control of their future, an integrated DER (iDER) strategy and approach is critical to manage their transition to the Energy Cloud, a platform of highly networked distributed energy, two-way power flows, and intelligent grid architecture. To help our clients navigate this changing landscape, Guidehouse has developed the Energy Cloud Playbook. The first part of the playbook is the iDER Maturity Model, which helps utilities assess their own iDER preparedness.

Guidehouse’s iDER Maturity Model

Guidehouse’s multifaceted iDER Maturity Model allows utilities to assess their progress toward DER integration. In this first in our series of posts on the Maturity Model, we provide a blueprint for what a fully integrated DER system looks like. The blueprint presented here would score the highest ranking of 5 in our Maturity Model, and then we define five levels of iDER maturity based on that blueprint. Future posts will establish the criteria for evaluating the remaining four maturity levels in more detail.

What Does a Fully Integrated DER System Look Like?

Utilities at advanced iDER maturity levels will have addressed issues arising from high DER penetration such as intermittency, reverse energy flows, and power quality issues. They are using information and operations technology (IT/OT) in coordination and have aligned their business processes, operations, and organization appropriately. DER management systems (DERMSs) and advanced distribution management systems (ADMSs) are managing DER output at the feeder and substation level. At this advanced DER maturity level, utilities have augmented their role as a supplier of electricity and have assumed the role of a platform provider enabling prosumers to market their DER assets in an open market. This role is not only critical to fully maximize the benefits of DER, but will be key to providing future value to the utilities’ customers and shareholders.

The graphic below summarizes Guidehouse’s blueprint for a fully integrated DER system. It shows utilities, customers, third parties, market operators, and regulators working in conjunction with iDER processes for full integration across operations, energy markets, and IRP. These processes are supported by critical information, operations, and communications technology (IOCT) systems to ensure active, real-time, and large-scale iDER management. In such a system, evolving energy economics and increasing customer choice, supported by strong policies and mandates, drive DER penetration. Third-party aggregators and customers are incentivized to participate in the local energy markers, supported by transactive energy platforms and systems.

Blueprint of a Fully Integrated DER System

(Source: Guidehouse)

iDER Maturity Levels

This blueprint for an advanced and fully functioning iDER system would score a 5 in Guidehouse’s iDER Maturity Model. Working backwards from there, Guidehouse has a multifaceted criteria model that benchmarks a utility at one of the five maturity levels, as laid out in the table below. What are the criteria for defining these levels of iDER maturity? What are some examples of utilities at each of these maturity levels? We will answer these questions in the next post in this blog series.

Proposed iDER Maturity Levels

(Source: Guidehouse)