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companies, and systems developers are approaching DER market opportunities with a variety of different business models. Generally, most regulated utilities are taking a "wait-and-see" approach to DER while monitoring technology developments, with several conducting pilot demonstration projects to become more familiar with the risk and business case. A few companies are offering standby/emergency back-up solutions to their customers.
A few companies are still working to develop a business and growth vector involving DER. For example, DTE's Energy|Now product line encompasses a range of technologies developed in cooperation with strategic partners, and Pepco Energy Services is involved with installing packaged microturbines in New York City and surrounding areas.
A few new companies have emerged that provide packaged systems for commercial/industrial and government facilities. Examples include RealEnergy, Northern Power Systems, Siemens Building Technologies, and UTC Power/Carrier. Most of these companies offer customer-owned systems, but several own and operate the systems and pass the energy savings on to end-users.
Pathways to the Future
EPRI's paper explores a number of pathways in which DER might evolve in the coming years ().
By far, end-users represent the primary pathway and application vector for DER systems, and they are likely to continue to be the chief area of application through 2015. End-users are seeking energy cost savings and higher reliability. They also desire turnkey energy solutions where a third party takes on the risks of the DER option and the energy offering. Possible end-use pathways for DER include replacement of existing backup power systems with cleaner dispatchable options, expanded use of CHP and other heat recovery/cooling applications, and new use of UPS's as both a back-up and a demand response tool.
The grid-support pathway comprises both T&D applications, in which utilities seek to avoid or defer infrastructure investment or to improve asset utilization. While DER has been said to offer the potential to avoid T&D infrastructure investments and provide other grid-support benefits, in practice these applications are very limited and site specific, primarily due to cost-effectiveness considerations and existing regulatory models. Utilities that have delayed infrastructure investments and have experienced load growth due to the rebounding economy are applying mobile DER (diesel gen sets) in critical areas, especially during the hot summer months. The awareness of using DER as a grid support option has increased among distribution planners, and some utilities have adopted the practice of evaluating DER options as part of their distribution planning process.
Absent better clarity on regulatory policy, DER options are likely to be introduced only incrementally for grid support and in new infrastructure redesign and implementation. Because some DER technologies have very low emissions, they may be employed in the near term in targeted applications to support the grid today. However, with the growing awareness of the aging infrastructure, incremental applications of DER might evolve in combination with the IntelliGrid () , advanced distribution automation and monitoring technologies, and new active demand-side management technologies to achieve a more robust and reliable grid. This pathway will evolve first in power distribution systems where line voltages are less than 35 kV and will include a