At Distributech 2025, Electron brought together three expert panelists to discuss how to orchestrate the value of distributed energy resources (DERs) using flexibility, at scale, to optimise the grid of the future.
The panelists were:
- Jo-Jo Hubbard, CEO and Co-Founder, Electron
- Sarah Colvin, CRO, Camus Energy
- Benjamin Lee, Director, Distribution Planning and Grid Modernization, Electric Power Engineers
The panel starts with the premise that DERs are grid assets. Serving load growth without such assets going forwards will be unconscionably expensive and slow.
Using the flexible capacity of DERs can help utilities make the most of existing grid and generation capacity, as well as accommodate the thousands of new DERs that will connect to the grid in the near future. Leveraging those DERs in the right way can help utilities optimise billions of dollars of grid investment.
Here’s a breakdown of what the panel shared.
The opportunity of DERs as grid assets
Traditionally, utilities focused on the wires and substations – the physical components of the grid – as the assets. Now, there is a shift to thinking about DERs as grid assets.
“We have to think about DERs differently, to use DERs to answer the questions we’re struggling with around safety, reliability, handling natural disasters. DERs are the solution to that,” says Sarah.
Incentivising DERs
The panel shared that utilities need to think about more than how to design markets or programs for DERs to participate as grid assets. They need to consider what assets are already available and how they can create the right opportunity for those DERs to participate.
In other words, how can utilities incentivise DERs to be visible and become dependable?
“Creating new incentives for DERs, whether through programs or price signalled markets, is a great way of creating more visibility and reliability when utilising DERs for flexibility,” says Jo-Jo.
“If you could have the option to turn up or down the DERs you don’t own, wouldn’t you want that? If we had ways to discover what that would cost you, wouldn’t you want to know that? How can we open up those processes to multiple DER operators to enable them to compete that price down over time? This is where flexibility markets prove valuable. They create new data and visibility of the MWs in your territory, and the tool by which you can activate them”.
Valuing DERs
When DERs are seen as grid assets, that means getting more out of the grid that’s already deployed. The panel highlights that this doesn’t stop the need for grid buildout. It instead helps enable affordability and energy equity when the assets are used to their full potential, to help optimise the grid.
“It’s about finding the value in the grid that you can then continually pay back to the grid,” says Jo-Jo. “The value volume flywheel explains how: the more value you can put into this market, the more volume – more MWs – you get out.”
This can then help with establishing where you need to invest in grid upgrades.
“You can then understand which parts of the network you build next based on the flexibility that gets you more volume, which gets you more value, and then that’s how the value volume flywheel starts to turn – and accelerate,” explains Jo-Jo.
In the UK, that value has already been demonstrated, so UK system operators are moving their understanding of what value DERs can offer to the next level.
“The big shift is when you start seeing the whole-system value of flexibility – seeing value from energy security, domestic growth, etc,” says Jo-Jo. “It all comes from operationalising and getting megawatts to join either a market, program, or other incentive structure, so you can start working out the full value.”
So, how can utilities kick start the process and orchestrate value from DERs through flexibility to see similar cost benefits?
The components needed to orchestrate DERs and surface value through flexibility
1. Move from forecasting based on peak load to time-series planning
Historically, utilities have always planned and built the system for peak demand. This is possible because traditional grid assets are there all the time to handle the peaks and troughs. The panel discussed how that reality is changing.
“There’s a need to change from peak load planning or load and DER forecasting to more time series planning and system analysis to identify solutions,” says Ben.
“We need to move towards considering what is the overload, what’s the magnitude, what’s duration, what’s the frequency, and how does that shift over time? Leveraging DERs can solve that.”
2. Understand DER needs and the tools required
There is also the technical challenge of integrating more DERs onto the grid. The panel shared how the incentives created need to consider the particular use cases for different DERs, to enable as many as possible to take part.
For small-scale DERs, utilities need to consider how to educate their customers and use the right data to design the best program or market.
For large-scale DERs, the challenge is the equipment they can access. How do we help with the interconnection process to get those resources connected faster and ensure that utilities are leveraging flexibility to balance what the system needs?
“You have to have the software platforms to pull all this in and make the right decisions,” says Sarah. “Have a hierarchy built of how you’re going to do load management and operationalise that flexibility so that you’re getting the value.”
3. Capture the right data to prove the value of DERs
Understanding the value, even with the right tools, requires the right data.
“If what we want for DERs is to offset grid needs, part of that is, first of all, understanding where those grid needs are,” says Ben.
“The traditional way of thinking about utilities and planning operations is not going to get us there. It’s really how do we best utilise those assets that we have and think about new assets that are not necessarily utility assets today.”
Mapping those assets requires consideration from a system perspective. The panel emphasised the role of standardisation and integrations, so that visibility can be drawn out across utility businesses and existing management tools, such as DERMS and VPPs.
However, data in US utilities can often appear siloed, within programs and teams. “You need to be looking across large loads as well as residential demand response,” says Sarah. “You need to be thinking about what’s happening in transportation. Pull all of these siloed, disparate parts of the organisation together with your planners, the IT operations, and so on.”
Markets and platforms can offer visibility – as has been recognised in the UK, where the unbundled nature of the value stream offers the same challenges as the data siloes in their US counterparts.
“When faced with silos, knowing where to standardise to enable interoperability and an open ecosystem is really important,” says Jo-Jo.
“This knowledge can be built with a good data and technology strategy. Building that visibility then makes it easier to set markets up to find all the MW opportunities from DERs across markets. The UK didn’t initially get it right across the silos and we spent a lot of resources and time untangling everything.”
4. Enable a dynamic feedback loop to iterate on planning
Once utilities have the data and planning processes in place, that’s where the continual improvement starts, the panel explained. The energy landscape is becoming inherently dynamic, with two-way energy flows, intermittent supply, and volatile demand. Any planning therefore requires a dynamic approach and an iterative feedback loop.
“You can’t design a program or market and then wait and see what happens,” says Sarah. “We have to learn from devices across the grid all the time, pooling that together and thinking, what does that mean? What is happening in the program, what does the grid need today?”
This feedback loop helps build confidence that DERs are dependable grid assets for utilities to call on.
“We know how to rely on wires and transformers, but we must test how we use DERs. That helps us become comfortable in relying on these dynamic assets,” says Ben.
Moving from pilot to action
Trust comes with time and learnings.
“As we pilot markets, we build more trust in relying on them to solve the grid needs,” says Ben.
“And it’s not necessarily sequential. We need to pilot it, then we need to look at the markets, see how DERs respond, and also implement ongoing planning improvements as well, using that information.”
That information has long-term benefits for influencing regulatory decisions, when collated in the right way.
“Everything together – visualising where your assets are, planning, running markets – helps build the case to start and then to build the right data to continually justify why you are making x, y, z, investment decisions,” says Jo-Jo.
“It’s a way to prove that you should be paid, be supported to invest in DERs, and that you are right to trust those DERs to show up.”
And, with load growth escalating, getting started is of paramount importance. “Getting started sometimes feels daunting,” says Ben.
“It has to start with planning. It has to start with bringing your teams together internally, having a common vision, and then starting to test out and pilot different things. You don’t need to wait. There’s a 2045 vision to where we need to get to – but we can get started now.”
Whether pilots or live markets, learning on the go is a key way to prove the value of operationalising DERs.
“That’s when you get real data,” says Jo-Jo. “Real data fed into the right feedback loop trumps years of design committees in time and efficacy every time.”
