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New York ISO releases blueprint for distributed energy resources

New York's grid operator has released a five-year road map for integrating distributed energy resources with the state's power system.

After a year of consulting stakeholders, the New York ISO on Feb. 2 issued the distributed energy resource road map to support the goals of Gov. Andrew Cuomo's statewide energy initiative known as Reforming the Energy Vision, or REV.

Brad Jones, NYISO President and CEO, said in a news release that the DER market blueprint will help transition New York's grid away from the "the century-old, centralized power system to a diverse, distributed, bidirectional grid." It specifically highlights market opportunities for emerging resources by guiding developers, communities and others as they invest in that increasingly flexible and dynamic grid, he said.

Distributed energy resources, or DER, such as solar panels, are located on a customer's premises that generates electricity for the customer's own needs but often can supply generation onto the wholesale market. In addition to behind-the-meter generation, DER also includes demand side management, energy storage or various combinations aggregated into a single entity.

NYISO believes effective integration of DER resources can help improve system efficiency and resiliency, energy security and fuel diversity while also allowing consumers to take greater control of their electricity usage and costs through new technologies.

"Distributed resources are becoming more economic. Sustainability and resiliency considerations are also driving the growth of distributed resources," said Rana Mukerji, NYISO senior vice president of market structures, in a media briefing. "The electric grid will have to enable energy flow from traditional as well as distributed resources."

Mukerji said FERC is "on board" with the move to integrate more DER. According to him, New York has about 1,200 MW of demand-side resources and potentially 250 MW of generation that is expected to enter the newly established behind-the-meter market this year.

The road map focuses on a number of priorities, including aligning DER with the goals of New York state's REV initiative and focusing on wholesale market transactions to determine the impact that distributed generation has on the bulk power system. The NYISO specifically plans on integrating distributed energy resources into New York's energy, ancillary services and capacity markets by providing avenues for them to take advantage of economic scheduling and real-time locational prices.

The NYISO also seeks to enhance measurement and verification methodologies to ensure accurate load forecasts, which are needed to balance real-time supply and demand. It also wants to align compensation for DER generation with wholesale service performance by developing incentives and compensation that reflect the flexibility and measured performance of distributed energy with system needs, as compared with other resources.

"While the types, configurations and capabilities of DER will vary, our primary objective is to allow for the seamless integration of DER into New York's wholesale electricity markets," said Michael DeSocio, NYISO senior manager of market design. He said the growth of more self-sufficient distributed generation sources will improve economic efficiency by reducing the need to call on higher-cost generating resources and create greater stability of electricity prices throughout the day by flattening load.