Exploring Distributed Energy Alternatives to Electrical Distribution Grid Expansion in Souhern California Edison Service Territory

Distributed energy (DE) technologies have received much attention for the energy savings and electric power reliability assurances that may be achieved by their widespread adoption. Fueling the attention have been the desires to globally reduce greenhouse gas emissions and concern about easing power transmission and distribution system capacity limitations and congestion. However, these benefits may come at a cost to the electric utility companies in terms of lost revenue and concerns with interconnection on the distribution system. This study assesses the costs and benefits of DE to both consumers and distribution utilities and expands upon a precursory study done with Detroit Edison (DTE)1, by evaluating the combined impact of DE, energy-efficiency, photovoltaics (a use of solar energy), and demand response that will shape the grid of the future. This study was funded by the U.S. Department of Energy (DOE), Gas Research Institute (GRI), American Electric Power (AEP), and Gas Technology Institute's (GTI) Distributed Energy Collaborative Program (DECP). It focuses on two real Southern California Edison (SCE) circuits, a 13 MW suburban circuit fictitiously named Justice on the Lincoln substation, and an 8 MW rural circuit fictitiously named Prosper on the Washington Substation. The primary objectives of the study were threefold: (1) Evaluate the potential for using advanced energy technologies, including DE, energy-efficiency (EE), demand response, electricity storage, and photovoltaics (PV), to reshape electric load curves by reducing peak demand, for real circuits. (2) Investigate the potential impact on guiding technology deployment and managing operation in a way that benefits both utilities and their customers by: (a) Improving grid load factor for utilities; (b) Reducing energy costs for customers; and (c) Optimizing electric demand growth. (3) Demonstrate benefits by reporting on a recently installed advanced energy system at a utility customer site. This study showed that advanced energy technologies are economical for many customers on the two SCE circuits analyzed, providing certain customers with considerable energy cost savings. Using reasonable assumptions about market penetration, the study showed that adding distributed generation would reduce peak demand on the two circuits enough to defer the need to upgrade circuit capacity. If the DE is optimally targeted, the deferral could economically benefit SCE, with cost savings that outweigh the lost revenues due to lower sales of electricity. To a lesser extent, economically justifiable energy-efficiency, photovoltaic technologies, and demand response could also help defer circuit capacity upgrades by reducing demand