2.3   What Are the Issues on DER Technologies Affecting Regulations?

2.3.3 What Are “Smart” DER Capabilities, and What Are Their Benefits?

Regulators are often not very familiar with the details of DER technologies and what has been termed “smart inverter” functionalities (see 3.4.1). This makes decision-making more difficult because the issues of interconnecting DER systems have become even more complex. Not only are customers reducing their loads and thus reducing utility revenues, but DER systems can cause planning and operational issues for utilities (see 3.3.4).  At the same time DER systems are being marketed as being able to benefit utility operations (see 3.3.3) and Table (see 4.2).

Utilities are reluctant to embrace some of these smart inverter functionalities without further studies on exactly how they can be coordinated with their existing equipment (3.3.4), what the interconnection requirements might be (see 3.7.2 and 3.7.3), and what DER communications requirements (see 3.7.4 and 3.7.5) might be needed to take advantage of some of these advanced DER capabilities. And yet utilities are increasingly aware of the problems associated with high penetrations of “less-smart” DER systems in Europe (see 4.5.1) and Hawaii (see 4.5.3), and recognize that these advanced DER functions must be embraced at one level or another.

Customers, aggregators, and other implementers of DER systems also have concerns which they bring to regulators.  The foremost of these is usually why utilities take so long to approve an interconnection – or why they might actually reject an interconnection (see 4.4.3). Additional concerns include whether “non-exporting” energy storage (see 4.4.4) should just be considered as negative load and not have to go through the interconnection process. Newer concerns relate to which advanced DER functions must or could be provided, what communications requirements will be necessary (see 3.7.4  and 3.7.5), whether these communication requirements can be “standardized” across different utilities and jurisdictions to provide interoperability (see 3.7.1) (DER vendors do not want to support large numbers of different communication protocols), and what cyber security protections need to be implemented (see 3.8).