IEEE Power & Energy Magazine - March/April 2022 - 30

valuation methodologies that include resiliency as well as
other value streams from NWA services.
Valuation for Resilience and Reliability
Reliability has long been at the core of grid planning, but
regulators are increasingly focusing on resiliency. Conventional
resource planning has focused on meeting peak system
or local grid needs through a combination of generation,
transmission, and distribution infrastructure. DER-based
NWAs can play a much-needed role in avoiding the need for
grid investment in the context of long-term system planning,
deferral, and capacity. In contrast to traditional reliability
metrics that are generally focused on predictable growth in
demand and associated infrastructure needed to support it,
resiliency is defined as the ability to respond to unplanned
disturbances. The CPUC staff concept paper on resiliency
highlights the " resilience " benefits a DER can provide as
illustrated in Figure 3.
Ascribing a specific resilience adder to conventional
valuation methodologies can be challenging because there
is a blurred line between systemwide benefits and individual
customer benefits. DER-based NWAs are in the early
stages of demonstrating their role in deferral of generation,
transmission, and distribution costs as well as in providing
capacity value that contributes to resilience and reliability
of the grid, despite agreement within traditional planning
processes on the value of resilience and reliability. While
efforts by state regulators have pushed the inclusion of
NWAs into these resource planning processes, attempts
to value resilience and reliability from NWAs have been
inconsistent. Resilience is often not valued quantitatively in
many valuation models because it is difficult to scope out
and conventional reliability metrics are not easily adaptable
to the new paradigm.
Attempts by regulators to assign a specific value to resiliency
have relied heavily on quantification of the cost of
interrupted power. These valuations follow one of two main
approaches: bottom-up or economy-wide. Consumer preferences
are measured via " stated preferences " on customer
Preparation
Adaptation
Resist and
Absorb
1
willingness to pay for measures to avoid power outages and/
or " revealed preferences " of actual customer purchases (e.g.,
backup generators and/or energy storage equipment) to avoid
power outages). More holistic resilience valuation methodologies
are the " economy-wide " approaches that seek to
quantify the impact of sustained power outages on regional
economies, including a loss of productivity, revenues, wages,
and employment.
While several proceedings and research projects are addressing
the need to value resilience and reliability in NWA methodologies,
there has been limited progress in developing
widely accepted valuation methods. A 2019 National Association
of Regulatory Utility Commissions report stated, " At
present, there are no standardized approaches for policymakers
or energy project developers to identify and value
energy resilience investments at the state, local, or individual
facility levels. " The report highlights several case
studies where bottom-up and economy-wide approaches
were used by states, cities, and institutions in their valuation
of proposed NWA solutions. The report pointed out
that while these case studies enhance NWA value, each
approach is limited either in scalability, outage duration, or
scope of outputs to warrant adoption in a regulatory context.
While there have been more efforts to deploy DERs for resilience
purposes since the report's publication, there remains
no agreed-upon standard to value DER's ability to avoid
outages or for DERs to reduce reliance on fossil-powered
backup generation.
In 2019, testimony as part of the Integrated Distributed
Energy Resources proceedings, VoteSolar and the Solar
Energy Industries Association proposed an explicit " resiliency "
adder of solar plus storage in avoided cost modeling
used by the CPUC. In their testimony, they estimated the
additional benefit of resilience attributed to solar and storage
systems based on a revealed preference model, assuming
that solar and storage would be installed in place of a portable
fossil-fuel generator. The " resiliency adder " included
calculations of equipment, installation, and air quality
costs of backup generators, arriving at an estimated value
Recovery
Mechanisms of Improving Resilience
1) Reduce Magnitude of Disruption
2) Extend Duration of Resistance
3) Reduce Duration of Disruption
4) Reduce Duration of Recovery
Respond and Adapt
23 4
Disturbance
Time
figure 3. Resiliency and system functions. (Source: CPUC 2020.)
30
ieee power & energy magazine
march/april 2022
Original System Function in
Response to Disturbance
More Resilient System Function
in Response to Disturbance
System Function Without
Disturbance
System Function F(t)
IEEE Power & Energy Magazine - March/April 2022

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