#USA #Boston #Pew Charitable Trusts #The Brattle Group #Distributed Energy Resources

Distributed Energy Resources: A Path to Cost Savings

A groundbreaking study conducted by The Brattle Group for The Pew Charitable Trusts highlights the potential impact of Distributed Energy Resources (DER) on the U.S. power system. The report emphasizes that by removing existing barriers and implementing supportive policies, significant cost savings can be realized for consumers and the grid.

Key Findings of the Report

The report titled "The National Case for a More Distributed Power Grid: New Evidence on Affordability and Demand Growth" asserts that enhancing the deployment of DERs—including distributed solar power, battery storage systems, and flexible demand management such as controlled electric vehicle (EV) charging—could avert an estimated $614 billion in expenses associated with the power system up to the year 2050. This action could counteract around half of the anticipated rises in household electricity bills, which are expected to spike due to inflation and increasing demand.

Methodology

The authors of the report employed a unique strategy that focuses on maximizing resources located near electricity consumers to accommodate growing demand while ensuring energy remains affordable. The analysis suggests that by eliminating critical policy obstacles to DER deployment, U.S. DER capacity could more than quadruple, adding over 400 gigawatts (GW) by 2050. This expansion would represent nearly one-third of the current total power generation capacity in the country.

Expert Insights

Ryan Hledik, a Principal at Brattle and co-author of the report, stated, “Many homes and businesses already possess technologies capable of assisting the grid in meeting rising demand. Our challenge lies in utilizing those resources efficiently in utility planning, rather than leaving their potential untapped.” He further noted that at scale, DERs could significantly reduce infrastructure investment needs and enhance consumer savings.

Once fully executed, the policy recommendations presented in the study could result in an impressive $266 billion in avoided power system costs by the year 2050. The primary suggestions include:

• - Integrating DERs into distribution system planning
• - Lowering permitting expenses
• - Streamlining interconnection processes

Economic and Environmental Benefits

In an era marked by unprecedented demand from data centers, manufacturing, and electrification, the report strongly argues that DERs could represent a feasible energy supply if we address the challenges hindering their adoption. Specifically, the study outlines several notable findings:
1. Reduced Bill Increases: The deployment of DERs could lead to an average household electricity bill reduction of $122 per year by 2050, absorbing about half of the projected increases associated with inflation.

2. Financial Incentives: Customers utilizing DERs can garner direct financial rewards for the services they provide to the grid, promoting a more equitable energy market that benefits all consumers through lower rates.

3. Maintaining Cost Efficiency: With uncertainties about future demand, the report indicates that a significant reliance on DERs could cut down overbuilding costs in energy infrastructure by around $33 billion between 2030 and 2040.

4. Enhanced Grid Flexibility: The proposed increase in DER resources would shift approximately 105 GW of utility-scale storage capacity to distributed systems, thus enhancing flexibility near the grid.

5. Lowering Natural Gas Dependency: The expansion of DER systems could prevent the need for about 70 GW of projected natural gas additions, equating to a reduction of around 175 natural gas plants nationwide.

6. Decreased Carbon Emissions: A significant advantage of deploying DERs is the projected reduction of cumulative carbon emissions by an estimated 3% through 2050 in the power sector alone.

7. Expense Reduction for Decarbonization: In the pursuit of a carbon-free generation fleet by 2050, the proposed DER enhancements would help offset around 175 GW of utility-scale capacity and bring down annual generation costs by $45 billion.

Conclusion

This report provides a compelling case for the necessity of pragmatic policy modifications that can unlock the potential of DER technologies. Removing these barriers could not only save billions in costs but also contribute to lowering emissions and constructing a more economical, dependable, and adaptable power grid for current and future demands.

For further insights and a thorough breakdown of the report, visit Brattle's website.

About The Brattle Group

The Brattle Group is a global consulting firm specializing in economics and finance, providing independent analysis in various sectors including energy, financial markets, and regulatory environments. With over 550 professionals, it serves clients that collectively cater to more than 90% of North American electricity consumers.

About The Pew Charitable Trusts

Established in 1948, the Pew Charitable Trusts harness data and research to tackle pressing global issues, striving for substantial advancements across various sectors.