IEEE Power & Energy Magazine - March/April 2022 - 35

distributed growth, such as the electrification of buildings
and EV charging.
At SMUD, retail electric rates were recently restructured
for solar and storage to provide stronger incentives
for energy storage. As the economics of energy storage
continue to improve, and customers increasingly use storage
to maximize onsite solar PV utilization and improve
resilience in the case of outages, the distribution system
hosting capacity for DERs and demand growth should also
improve. Again, however, this depends on where batteries
are installed on the system and the extent to which their use
can be influenced.
Nearly all of today's PV and storage systems are also
equipped with " smart inverters " that can ride through voltage
swings and autonomously adjust to stabilize the voltage
and frequency on a circuit, thus contributing to stability
and capacity rather than placing limitations on the hosting
capacity. Therefore, rather than being concerned about
the hosting capacity for DERs, these resources can become
assets that reduce operation costs and help accommodate the
significant load growth expectations from the electrification
of transportation and buildings.
Capturing the Value of Flexible Load Will
Significantly Reduce Costs for Integrating DERs
In our scenarios, DERs add load, mainly through the growth
of EVs and electrification of buildings. As the load increases,
so does the need for distribution system upgrades to support
the growth. The question for DERs, then, becomes, " How
can we use them to reduce the overall costs for distribution
system upgrades and operation? "
The study shows that the difference in costs between
a system where DERs are carefully managed and one in
which DERs are not controlled and capabilities are not
used to support distribution system operations is about
10%. In other words, distribution system capital costs can
be reduced by 10% by harnessing DERs' capabilities to
reduce the peak load, support voltage stability, minimize
backfeed, and control the timing of the load. These savings
are made possible by a relatively limited subset of DERs,
namely, demand response, managed charging, and demand
response from EVs, as well as the managed use of distributed
battery storage. Together, these resources help to defer
investments, primarily in distribution substation upgrades
and, to a lesser extent, the costs of service transformer
upgrades and reconductoring.
Figure 2 illustrates the relative magnitude of cost savings
for substations, feeder upgrades, and service transformers
as a result of utilizing the capabilities and demand
impacts of DERs. Not surprisingly, the exact locations of
new load growth and controllable DERs are very uncertain,
and modeling future system scenarios is driven, in part, by
assumptions. Therefore, the estimated cost savings shown in
Figure 2 are also uncertain. Despite that, it is important to
count and consider these potential savings and adjust distribution
planning practices to make the savings visible.
Figure 2 suggests that, overall, the peak contribution
of DERs is fairly limited. (SMUD's annual system peak is
about 3,000 MW.) However, small contributions in strategic
locations of the grid can provide significant value. Figure 2
also indicates that the contributions from energy storage
and EVs are limited. This is mainly a result of the relatively
low adoption expected among residential customers. While
valuable, these resources take time to grow, and there is
little operational experience to see how they perform when
their reliability and predictability are critical, e.g., at summer
peak load conditions, when they may need to deliver
energy and capacity for multiple days during a heatwave.
6
EVs
4
2
Demand
Response
and Energy
Efficiency
Substation
Before DERs
(a)
(b)
figure 2. The DER costs and value of DER controls in SMUD's IDRP study: the (a) DER capacity at the system peak in
2030 and (b) cumulative cost of supporting DER growth.
march/april 2022
ieee power & energy magazine
35
Feeders
Service Transformer
With DERs Contributing
Energy
Storage
Cost Savings
From Utilizing
DERs
MW
Distribution System
Capital Costs (US$ Million)

IEEE Power & Energy Magazine - March/April 2022

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