Distributed Energy Resources Can Provide Valuable Grid Services
Distributed energy resources (DERs) are typically small-scale power resources that are interconnected across the distribution system. In addition to generating, storing, and modulating the use of electricity, DERs can provide a range of other services to the electric grid. These services can play a critical role in meeting local demand, easing localized constraints, and improving reliability. DERs have the potential to provide these services more quickly, at less cost, and with fewer community burdens than traditional grid infrastructure solutions.
Examples of DERs include, but are not limited to
- Solar + storage projects
- Smart devices, such as thermostats
- Stand-alone battery energy storage systems
- Electric vehicles (EVs)
While DERs are deployed broadly in Massachusetts today, we have only begun to tap their potential to respond to location-specific needs on the distribution grid. One key to unlocking this value is determining the appropriate, effective level of compensation for DERs that provide valuable grid services. This calculation is complex, requiring a balance between incentivizing reliable participation, keeping costs affordable for all customers, and ensuring equitable opportunities for participation.
What is the Grid Services Study?
The Grid Services Study is an initiative that created:
- An initial compensation framework for DERs providing location-specific grid services to the distribution grid, including exploring the value that using DERs flexibly can provide in Environmental Justice communities.
- A roadmap intended to guide the longer-term development of DER flexibility to support the distribution grid.
The Grid Services Study was proposed as part of the utilities’ Electric Sector Modernization Plans (ESMPs), informed by prior collaborative work on the Value of DERs with MassCEC. MassCEC facilitated the project team collaboration and led the Study, which includes representatives from:
- the Massachusetts Department of Energy Resources
- the Massachusetts Attorney General’s Office
- the state's three investor-owned utilities -- Eversource, National Grid, and Unitil
The project was supported by our consulting partners Energy and Environmental Economics (E3) and RMI and included engagement with a diverse range of stakeholders.
Grid Services Study Deliverables
- Final Study Report: Includes an overview of the work and future implementation roadmap.
- Valuation Model: An Excel spreadsheet model to supplement the final report. The valuation model illustrates approaches to estimating the value of grid services in Massachusetts, providing transparency into the methodologies developed in the Study. The model describes general methodologies which can be applied in different scenarios of localized grid need, with a focus on the values which most directly impact ratepayers. The model also includes means for determining potential environmental justice adders. These valuation methods help inform the compensation mechanisms that the EDCs will ultimately develop.
- Valuation Model Recorded Training: Provides an overview and a “how to” guide for the valuation model. The training helps stakeholders understand how these valuation tools work. After viewing this recording, stakeholders will ideally
- Understand how to use the valuation tools and understand how the value of DERs can be calculated.
- Understand that the valuation helps to inform how much compensation DER participants might receive as part of a Grid Services offering.
- Understand that outputs of this tool do not guarantee specific values or payments to be made but are instead meant to offer example scenarios. Ultimately, grid services values are location-specific, and will be determined on a case-by-case basis by the utilities.
- Optionality Value Example Model: The optionality value of DERs reflects the additional potential benefit of waiting to make investments in the face of uncertainty. This Excel spreadsheet model illustrates examples of how to quantify additional benefits from optionality.
- Feedback Tracker: Logs and summarizes each piece of feedback received from stakeholders throughout the study.
Project Timeline
Process Step |
Timing |
|---|---|
Work begins |
October 2024 |
Stakeholder Workshop 1 |
December 16, 2024: See below for details |
Stakeholder Workshop 2 |
March 3, 2025: See below for details |
Stakeholder Workshop 3 |
April 25, 2025: See below for details |
Stakeholder Workshop 4 |
June 10, 2025: See below for details |
Work concludes; final report released |
September 2025 |
Stakeholder Workshops
Stakeholder Workshop 1
Workshop 1 built a foundational understanding and vision for grid services in MA. The workshop covered the goals and intended approach for establishing a compensation mechanism for the value that distributed energy resources (DERs) can provide to the distribution grid. The role and opportunity for future stakeholder engagement was also highlighted.
Stakeholder Workshop 1 Materials
Stakeholder Workshop 2
Workshop 2 highlighted the valuation framework created by the project team and explored how valuation connects to compensation. The workshop included opportunities for feedback on both valuation and compensation, with a specific lens on equity.
Stakeholder Workshop 2 Materials
Stakeholder Workshop 3
Workshop 3 provided stakeholders with an overview and discussion of compensation mechanisms. The workshop also highlighted key feedback on environmental justice and equity.
Stakeholder Workshop 3 Materials
Stakeholder Workshop 4
Workshop 4 focused on the study’s implementation vision and roadmap that will guide the future development and utilization of DER flexibility. It covered an outline and key topics of the roadmap and asked participants to weigh in on the content and on short and long-term objectives for utilizing DER flexibility for distribution grid services in Massachusetts.
Stakeholder Workshop 4 Materials
Environmental Justice (EJ) Focus Group
EJ Focus Group Materials
Environmental Justice (EJ) Focus Group Presentation
The slides above were presented to equity and environmental justice focus groups in April 2025 to introduce the Grid Services Study. You can find these topics in the video recording at the time markers noted:
- How the Massachusetts electric grid has traditionally worked (what it was built for, how it meets new electric demand) (3:07)
- What makes today a unique time for the grid; emerging questions about our energy system (7:11)
- What DERs are and how they can be a part of the solution for meeting the changing needs of the Massachusetts grid (10:33)
- An introduction to the role of this Grid Services Study (17:04)