The new rule, implemented by the nation's energy regulator, will enable distributed energy resource aggregators to compete in all regional organised wholesale electric markets
A landmark action has been approved by the US energy regulator that will “break down barriers” to emerging technologies in the country.
The Federal Energy Regulatory Commission’s (FERC) new rule will enable distributed energy resource (DER) aggregators to compete in all regional organised wholesale electric markets.
DERs, which are located on the distribution system, a distribution subsystem or behind a customer meter, range from electric storage and intermittent generation to distributed generation, demand response, energy efficiency, thermal storage and electric vehicles and their charging equipment.
The regulator claims its “bold action” will empower new technologies to come online and participate on a level playing field, while further enhancing competition, encouraging innovation and driving down costs for consumers.
FERC’s action breaks new ground towards creating the ‘grid of the future’
FERC chairman Neil Chatterjee said the agency has broken new ground towards creating the grid of the future by “knocking down barriers to entry for emerging technologies”.
“With this final rule on DERs, we build on the significant progress already made through Order 841 and expand our ability to harness the full potential of these flexible resources,” he added.
“By relying on simple market principles and unleashing the power of innovation, this order will allow us to build a smarter, more dynamic grid that can help America keep pace with our ever-evolving energy demands.
“I am honoured to be at the helm of the agency as we bring this critical rule across the finish line and continue to navigate our nation’s energy transition.”
FERC said the final rule will enable emerging technologies to participate in the regional organised wholesale capacity, energy and ancillary services markets alongside traditional resources.
It added that multiple DERs are able to aggregate in order to satisfy minimum size and performance requirements that they “might not meet individually”.
Under the new rule, regional grid operators will be forced to revise their tariffs to establish DER aggregators as a type of market participant, allowing them to register their resources under one or more participation models that accommodate the physical and operational characteristics of those resources.
Latest action builds off order to smooth transition to clean energy future
The latest action builds off the DC Circuit Court’s recent ruling on the approval of Order 841, which was proposed by FERC to remove barriers to the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by Regional Transmission Organisations (RTO) and Independent System Operators (ISO).
The regulator described the order as the “single most important act” the US could take in smoothly transitioning to a “clean energy future”.
FERC said Order 2222 prohibits retail regulatory authorities from broadly excluding DERs from participating in regional markets.
But its new jurisdiction prevents regional grid operators from accepting bids from the aggregation of customers of a small utility unless the “relevant retail regulatory authority for that utility allows such participation”.
The regulator believes the regulation also respects retail regulators’ current ability to prohibit retail customers’ demand response from being bid into regional markets by aggregators.
The regulation will be enacted 90 days after publication and within 270 days of the effective date, grid operators must submit a “compliance filing” and a “plan for timely implementation” of the final rule to FERC.