The U.S. clean energy transition is expected to accelerate this year, buoyed by recent policy and other actions, but transmission and financing are among its challenges. The following is a snapshot of some of the major developments and trends expected in nine critical areas of the energy transition this year...

Distributed energy resources: All eyes are on virtual power plants

Distributed energy resources — including rooftop solar, battery storage and electric vehicles — have been expanding on the U.S. grid in recent years, but looking to 2024, some experts see a clear focus on virtual power plants.

VPPs — essentially aggregations of distributed energy resources, which can operate on the grid like makeshift power plants — are at a potential inflection point, a September report from the U.S. Department of Energy concluded. The agency estimates that tripling VPP capacity to between 80 GW and 160 GW by 2030 could lead to power system savings of $10 billion a year.  

“The notion of distributed resources of various kinds that can be dispatched, can be controlled — that I think is a broad theme going into 2024,” said Ryan Katofsky, senior fellow at Advanced Energy United.

“We’re going to see more emphasis on ways to grow that market, and to take more advantage of those resources as they come on to the grid,” he added.

There are a couple of different factors driving this interest in VPPs. There are simply more distributed resources being deployed, leading to more scrutiny into how they can be integrated into the operations of the grid, Katofsky said. There’s also a focus on the role VPPs can play in ensuring grid reliability, as well as addressing the general need for more flexibility on the demand side, he added.

Simultaneously, the move to electrify the transportation and buildings sectors is also leading to load growth after several years of relatively flat electricity sales.

“So there’s changing load shapes and increasing demand — and distributed resources that are controllable can help address those needs,” he said.

So far, a lot of the DERs deployed on the grid have been rooftop solar. But there’s been an increasing shift towards distributed storage that is expected to continue and intensify in 2024, especially as electricity system planners keep an eye on reliability needs.

On the regulatory front, 2024 will continue to see a lot of activity around the implementation of the Federal Energy Regulatory Commission’s Order 2222, a 2020 decision that instructed regional transmission organizations and independent system operators to remove barriers that could prevent aggregations of DERs from participating in wholesale power markets, according to Katofsky.

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