WVU College of Law
Extreme weather events, which are occurring with increasing frequency as a result of climate change, threaten the reliability and resilience of the nation's electricity grid. Increased flooding due to intense rainfall, hurricane damage fueled in part by a warmer atmosphere and warmer, higher seas, and widespread wildfires caused by extended drought conditions constitute potential hazards for utility infrastructure and delivery of essential electricity service. As a possible adaptation strategy, increased deployment of distributed energy resources (DERs), which are small-scale generating resources located near-and connected to-a load being served with or without grid interconnection, can improve the resilience of the electric system in the face of the increasing frequency of extreme weather events, by avoiding some of the systemic vulnerabilities of a centralized large grid.
The experience of Hurricane Sandy (ultimately downgraded to "Superstorm" Sandy by the time it hit the coasts of New York and New Jersey in late October 2012) provides a case study of the resilience benefits of DERs, and the lessons that can be learned as utilities plan for increasingly frequent extreme weather events of the future. Superstorm Sandy was the deadliest and most destructive hurricane of the 2012 Atlantic hurricane season, resulting in 286 deaths and $68 billion in damages. The storm's diameter extended almost 1,000 miles, and produced a storm surge of 14 feet at the Battery in lower Manhattan that was at least three feet higher than prior reported storm tides. Approximately 8.5 million utility customers along the eastern U.S. lost power during Sandy. Apart from the sheer magnitude of the disaster in terms of fatalities and destruction, Superstorm Sandy provided a "wake up call" for energy providers, and electric utilities in particular, on the need to adopt a different set of long-term planning tools to improve the resilience of the electric system to cope with the anticipated extreme weather events of the future.
One such tool is an expanded role for DERs and microgrids. If the electrical grid is impaired, DERs can be configured to "island" from the grid, thereby ensuring an uninterrupted supplyof power to utility customers within a "microgrid." That was the experience from Superstorm Sandy, where the use of microgrids and DERs enabled power to be provided to pockets of consumers in the face of widespread outages of central power plants and the associated transmission and distribution (T&D) systems. While extended power outages affected the region for days, many commercial and industrial facilities and educational institutions in the area (including Princeton University's campus in New Jersey and New York University's campus in lower Manhattan) were able to continue operating uninterrupted, due to on-site DG facilities, primarily cogeneration or combined heat and power (CHP) facilities. DG resources offer the opportunity to improve the resilience of the electrical grid, mitigating the impacts of an emergency by keeping critical facilities running without any interruption in service.
At the same time, it is difficult to quantify the resilience value of DERs and microgrids. To what extent is the grid more resilient due to the presence of DERs? What are the tools available to place a value on this increased resilience? Is it possible to place a value on the continued availability of critical facilities during an extended grid outage? As states move away from compensating DERs through net metering-based on the serving utility's retail rate toward a system based on paying DERs according to their actual contributions to the grid-it becomes increasingly important to try to place a value on the resilience benefits that DERs provide to the grid, to ensure that DER owners and operators receive accurate price signals to stimulate an economically efficient level of investment.
This article describes the experience of Superstorm Sandy and the resilience benefits that were provided by DERs and mircrogrids during that particular extreme weather event. The article then discusses recent developments in the approaches for compensating DERs, which is driving the need to quantify the resilience benefits of DERs. Next, the article will review recent efforts to place a value on the resilience benefits of DERs, followed by some concluding observations.
Original Publication Title
Journal of Land Use & Environmental Law
Digital Commons Citation
Van Nostrand, James M., "Quantifying the Resilience Value of Distributed Energy Resources" (2019). Law Faculty Scholarship. 41.
35 Journal of Land Use & Environmental Law 15