Discom Business Models Require Changes to Promote Distributed Energy Resources

The first paper discussed different business models that can be used to support DERs and concluded that allowing private sector participants to assist customers and bring the latest technologies and private capital to DER investment is the fastest path to achieving India’s goals.1 It recommended key actions that regulators and policy makers must take; developing the policies needed to facilitate D. [...] Literature suggests and experience shows that, while a cost-of-service approach is useful to evaluate costs, there are limitations to the approach, especially in its inability to provide incentives to utilities to innovate, minimize costs, and provide better services to customers. [...] These need to be addressed based on the specifics of the discom and the rate of penetration of DERs. [...] Require Discoms to Evaluate Non-Wires Alternatives (NWAs) to Meet System Needs Where Practical and Cost Effective The traditional business practice for utilities in general is to plan for load growth using a conventional engineering approach to meet the need through the supply side; to build power plants, substations, to extend the network with cables, and transformers, etc. [...] Require Discoms to Modify Tariff Design to Send Unbundled Granular Price Signals to Facilitate DERs DERs provide value-added services to the grid, both at the retail and at the wholesale level.