4Q 2022

Analyst Insight: FERC 2222 and Global DER Deployment Insights

Global DER Deployment Insights

As distributed energy resources (DER) penetrate the electricity grid,  how they will be integrated into the broader electricity marketplace and pricing structure remains an open question. If not properly managed, DER resources co-located in similar areas can strain the grid and generate significant peak loads. To address some of these issues, the Federal Energy Regulatory Commission (FERC), issued Order 2222, which enables aggregated DER to be compensated for the flexibility they provide the grid by allowing them to compete in regional organized wholesale markets alongside traditional resources—essentially linking the retail and wholesale markets. The order also shows that the commission intends to work hastily toward a greener grid, while realizing full value of DER.

Focusing on FERC Order 2222, this Analyst Insight addresses how current regional transmission operators (RTOs) and independent system operators (ISOs) are responding to the order and its short- and long-term implications. It also offers recommendations for regulatory, RTO/RTO, DER vendors and integrators, and renewable energy developer stakeholders.

The report reviews the Guidehouse Insights Global DER Deployment Database 3Q22, which shows that the global DER market is expected to grow at a 13.9% CAGR from 2022 to 2031. Exponential growth comes largely from EV charging adoption projections. China and the US lead in expected cumulative DER capacity, with Japan and Germany as other significant country-level contributors.

Pages 17
Tables | Charts | Figures 5
  • How are RTOs working to comply with FERC order 2222?
  • What can stakeholders do to best adapt to FERC 2222?
  • What are the key drivers for different DER technologies around the world?
  • How are DER technologies evolving in terms of reliability and integration into the grid?
  • What are the major DER developments in each global region to date?
  • How are DER deployments expected to displace traditional, centralized generation around the world?
  • How is the US DER capacity market expected to grow by application?
  • Solar developers, installers, and operators
  • Genset and microturbine vendors
  • Fuel cell vendors
  • Microgrid vendors
  • EV charging vendors and service providers
  • Energy suppliers, utilities, and grid operators
  • Energy service companies (ESCOs)
  • Regional Transmission Organizations (RTOs)
  • Government agencies
  • Investor community

Introduction

Scope

DER Market Overview

FERC 2222 Overview and Timeline

Where are RTOs and DSOs?

FERC 2222 Implementation Drivers and Barriers

DER Market Inflection Trends

DER Deployment Market Forecast and DER v Utility Scale Forecast

Key Recommendations

Acronyms, Resources and Contact

  • Annual Total DER Capacity by Region, World Markets: 2022-2031
  • Annual Total DER Capacity, United States: 2022-2031
  • DER versus New Centralized Generation Capacity Additions, World Markets: 2022-2031
  • FERC 2222 Implementation Drivers and Barriers: Impact over the next 10 years
  • DER Industry Growth Potential by Region, World Markets: 2022-2031