Analytical Framework of Distributed PV Costs and Benefits
As part of preliminary analysis, RMI completed an analytical framework to enable an assessment of the costs and benefits of distributed solar generation on the electric supply system at current and future projected penetrations.
A growing body of work has begun to provide needed analysis and quantitative rigor to support the technical viability of integrating significantly higher amounts of renewable energy and energy efficiency to power the U.S. electricity system. However, there is comparatively little analysis into the role that distributed energy resources (DERs) could play as part of a future electricity resource portfolio, hindering the ability to holistically understand the potential for efficiency, demand response, and local generation to displace other generation or grid investments, at potentially lower cost and/ or increased efficiency.
Better analytical tools are necessary to support effective decision-making regarding the potential and implications of DERs. This analysis should include an evaluation of the net effect of DER integration on grid operations and future resource requirements, and of the economic implications for the system’s stakeholders. Critical questions include:
- What is the net effect of DER integration on system operations and future resource requirements?
- How can utilities, customers, and any third-party stakeholders be properly rewarded for the services they provide to the grid?
- How can we structure policies and regulations to encourage innovation and investments that reduce the overall cost of the system?
To address these needs, RMI is constructing the Electricity Distribution Grid Evaluator (EDGE) model (Figure 1).
The EDGE model is a MATLAB-based simulation tool designed to comprehensively assess the DER value proposition in different regulatory and utility business model environments based on a detailed assessment of the technical and operational implications. Though designed to study an individual utility or region (e.g., a balancing area), the model maintains the flexibility to be adapted for use with many different utilities or regions. The ability to alter these parameters will allow RMI to identify conditions that optimize value, and to test the effects of new, innovative business models and rate structures.
The EDGE model will provide an analytical basis for assessment of the costs and values created by all resources, including DERs, from the unique perspectives of each stakeholder group. To do so, the EDGE model incorporates the key drivers of value in electricity system planning and operations—location, timing, and controllability. These drivers are then integrated over multiple timescales—sub-hourly distribution system simulation, hourly bulk power dispatch, and annual resource portfolio planning. Additionally, the model is bound by certain constraints. These include:
- Regional supply limitations
- Operational limitations (including both planning and operating reserves)
- Specific policy requirements (e.g., renewable portfolio standards)
Download the EDGE Model Whitepaper