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DERs and Clean Energy: Our Path to a Greener Future

Updated: Jan 28, 2022

By Hamilton Steimer

The clean energy field is growing rapidly, and its future is bright. Since 2008, renewable electricity generation in the US has more than doubled, and the Energy Information Administration projects it to double again by 2050. Electricity demand in general is projected to grow 0.85% on average annually through 2050 as more end uses switch from fossil fuels to electricity.

Although utility-scale renewable electricity has been the main highlight of the past decade, smaller scale systems and other clean energy technologies will play a crucial role in the full decarbonization of the power grid. These smaller energy systems, which are considered distributed energy resources (DERs), provide numerous benefits to customers and the larger energy grid.

DERs and clean energy technologies include rooftop solar, battery energy storage systems, electric heat pumps, and electric vehicles, all of which will help reduce emissions and air pollution from the power, transportation, and residential sectors. As these technologies continue to improve and become more affordable to everyday consumers, they will play an increasingly important role in achieving a greener future.

Defining DERs and Clean Energy Technologies

Distributed Energy Resources

As defined by the North American Electric Reliability Corporation (NERC), North America’s electric power regulatory authority, a DER is “any resource on the distribution system that produces electricity and is not otherwise included in the formal NERC definition of the Bulk Electric System.” Basically, these are resources that produce electricity, usually at a smaller scale, which do not primarily feed into the larger bulk power system. Examples include:

  • Distributed Generation

  • Behind the Meter Generation

  • Energy Storage Facility

  • DER aggregation

  • Micro-grid

  • Cogeneration

  • Back-up Generation

When referring to DERs, I will be referring to only Behind the Meter Generation and Energy Storage Facilities, although I hope to talk about the other types in later blog posts. Additionally, I only consider small scale renewable energy systems as DERs in this blog. Energy systems like diesel back-up power generators technically represent DERs, but I do not discuss these as they rely on fossil fuels.

Clean Energy Technologies

Clean energy and renewable energy can be difficult to differentiate because, as defined here, clean energy “works by producing power without having negative environmental impacts.” While renewable energy is considered clean energy, clean energy sources are usually categorized as such because they do not produce air pollutants.

I think of clean energy technologies a little differently, describing clean energy technologies to be those that utilize electricity, such as electric vehicles, electric heat pumps, electric water heaters, and others. These technologies replace “conventional” technologies that utilize fossil fuels for power, so while the electricity that powers clean energy technologies may not be 100% renewable, these technologies do not produce direct emissions or air pollution. Although these could more easily be described as just electric technologies, calling them “clean energy” technologies emphasizes their main environmental benefits and differentiates them from other, less significant electric technologies.

Examples of DERs and Clean Energy Technologies

There are various types of DERs and clean energy technologies that can be utilized by residential, commercial, and industrial consumers. Some examples are provided below:

Rooftop Solar PV

Rooftop solar PV systems enable home and building owners to generate their own electricity using solar panels installed on their roofs. 96% of the nation’s 3 million PV systems are residential rooftop systems, although the majority of installed generating capacity is medium- and utility-scale solar PV facilities. In 2019, the median residential PV system was 6.5 kW, and according to NREL’s Annual Technology Baseline, the CAPEX cost of residential rooftop solar was $2,710/kW for 2020. While utility-scale solar PV facilities need to be one of the main replacements for retiring coal plants and eventually, natural gas plants, rooftop solar PV will also play an important role as society continues to electrify and decarbonize.

Battery Energy Storage Systems

Battery energy storage systems can be connected to the grid and to a DER, and they store energy to be used when needed, usually during emergencies or power outages. According to the EIA, as of 2018, there were approximately 234 MW of existing small-scale storage capacity in the US, with most of that existing in California. Other utilities, such as Green Mountain Power in Vermont, have created incentive programs to encourage the promotion of battery storage adoption. While battery costs have improved over time, they remain high, with NREL’s latest estimates stating 3 kW/5 kW systems have installed costs of $11,823 and $21,471, respectively.

Electric Heat Pump

Electric heat pumps, such as air source heat pumps, are becoming increasingly popular options to efficiently heat homes or buildings. These systems can deliver more heat energy than the energy used to power them, resulting in efficiencies well over 100%. Prices can range, potentially costing more than $10,000 for a large building.

Electric Vehicle

While they have gained popularity in recent years, EVs are still a minority in most vehicle markets, only making up 2% of new car purchases in 2020 in the US. Tesla may be the most widely known EV brand, but there are many different EV manufacturers, including well-known companies like Ford, Nissan, and Volkswagen, who have expanded their electric vehicle options in recent years. EVs are expected to increase in popularity, going from 1.8 million in 2020 to 5.9 million by 2030, and experts with the International Council on Clean Transportation (ICCT) predict battery pack costs will decrease to $72/kWh by 2030.

How do DERs and Clean Energy Technologies benefit Customers and the Grid?

Meet Growing Energy Demand

The EIA projects global energy demand to grow by 50% by 2050. Energy growth in the US will be slower, but it will continue to rise as society continues to electrify and climate change influences end energy use, such as increased use of air conditioning. DERs can help meet this growing demand by enabling residential and commercial customers to meet their energy needs with their own energy systems. Clean energy technologies are often more efficient than their fossil fuel counterparts and can produce energy savings.

Ensure Reliable Power

Extreme weather events can knock out power to homes and businesses, sometimes for months, like in Puerto Rico after Hurricane Maria. Rooftop solar installations, battery energy storage systems, and even electric vehicles can be used as sources of back-up power to meet all or parts of homes’ and businesses’ energy needs, even when power from the main grid is unavailable.

Produce Environmental Benefits

In addition to producing greenhouse gas emissions, burning fossil fuels like coal can contribute to the production of the 6 criteria air pollutants: ozone, particular matter, carbon monoxide, lead, sulfur dioxide, and nitrogen oxide. DERs mitigate the need for additional upstream power generation, reducing emissions and air pollution from fossil fuel power plants. Regardless of electricity source, clean energy technologies will also eliminate locally produced air pollution and emissions.

Save Customers Money

Many clean energy technologies such as electric vehicles and electric heat pumps produce significant fuel cost savings and energy savings, saving customers hundreds of dollars a year. DERs, by providing some level of energy independence, can also isolate customers from fluctuating energy and fuel costs, which can impose unexpected costs on consumers.

What’s next for DERs and Clean Energy Technologies?

Without financing support, DERs and clean energy technologies can be expensive and possibly out of reach for some homeowners and small businesses. However, cost improvements and generous policy incentives in some states, such as Massachusett’s SMART Program, have made it easier for customers to save money and payback their energy upgrades more quickly.

We know more work needs to be done to decarbonize society, and DERs and clean energy technologies will be increasingly important. We need to consider additional policies and financing programs that will make these upgrades more affordable and accessible to everyday consumers. With the Build Back Better Act just recently failing in Congress, new alternatives must be quickly identified and enacted.

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