Distributed Energy Resources

NYISO: Creating Vibrant Wholesale Markets for Dispatchable DER

Feb. 9, 2017

The New York Independent System Operator (NYISO) has recently released a comprehensive report that address numerous elements necessary for the NY REV initiative to move forward.

How do you create new markets? If Wall Street is any example, you get people bickering, doing deals, and over time a market develops.

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Buttonwood diorama. NYSE. Museum of the City of New York from the Gottscho-Schleisner Collection (Library of Congress) Reproduction number: LC-G612-T-47539-A

The New York Independent System Operator (NYISO) has recently released a comprehensive report that addresses numerous elements necessary for the NY REV initiative to move forward when it comes to optimal utilization of Distributed Energy Resources (DER).

The report emphasizes the need for NYISO to continue to provide stakeholders and the public “independent and impartial information it can trust” to ensure its roadmap leads as desired to the decentralized infrastructure and more dynamic market of the future

The key objectives are to:

Integrate DER into Energy, Ancillary Services, and Capacity markets;
Align with the goals of New York State’s REV;
Enhance measurement and verification methodologies;
Align compensation with wholesale service performance; and
Focus on wholesale market transactions.

These initiatives by the NYISO to enhance wholesale market participation of DER are counterpointed on the retail side with DER-related efforts underway by the NY Public Service Commission (PSC) since 2014, as part of in its Reforming the Energy Vision proceeding (REV).

Wholesale Service (direct to ISO) meets Retail Service (Direct to DSP)

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The proceeding is designed to examine how regulatory policies, utility business models, and market designs could be enhanced to encourage investment in, and operation of, DER technologies.

Through the retail market changes brought by REV, DER will serve local needs through Distribution System Platform (DSP) providers that plan, operate, and administer retail markets for distribution-level services.” (From NYISO Report, page 10, Figure from page 6).

NYISO is to be commended for having developed a highly flexible transition plan which optimizes current capability’s benefits while ensuring uptake of deeper DER integration capabilities. And yet while being flexible and practical, the plan is also highly detailed regarding Measurement and Verification and market mechanisms for ensuring a robust market, as well as modelling numerous use cases for dispatch of DER under different customer, load, generation and infrastructure scenarios.

The full 39-page report is available at this link.