Signal 1: Distributed Energy Resources

New York City’s energy infrastructure is aging, dirty, inefficient, and faces risk from climate change.

One solution lies in the development of distributed energy resources (DERs). DERs include small-scale and/or onsite solar panels, batteries, combined heat and power plants, electric vehicles, and demand response applications.

DERs hold the potential to supplement or even replace the traditional power generation model of large, polluting fossil fueled power plants that rely on long transmission lines that are subject to congestion. DERs can provide energy security for properties where they are located. They can also relieve stress on the local grid at peak demand by providing excess energy. In doing so the development of DERs can keep dirtier “peaker plants” offline and can defer capital improvements.

To realize the promise of DERs, regulators must incentivize utilities and project developers properly. They must also ensure that utilities share data with building operators and DER project developers showing them optimal time periods to charge or discharge, use or share power, and ramp down energy consumption. Finally, they also must share information on where DERs would most benefit the grid. DERs hold great potential, but regulatory bodies must align utility and project developer incentives to support them.