Rooftop Solar Will Soon Be Allowed to Compete in the Wholesale Electricity Market


David Roberts reports today on changes at the Federal Energy Regulatory Commission. In particular, they’ve proposed a new rule that would allow small, distributed energy resources to compete in the wholesale electricity market:

There’s a wide range of DERs: generation, like rooftop solar; storage, like home or EV batteries; and smart software/devices/appliances, like the Nest thermostat.

Until fairly recently, DERs were too widely dispersed, poorly tracked, and small in scale to play a role in wholesale energy markets. To participate, they needed to be more trackable, predictable, and controllable.

That’s starting to happen. In particular, it is now possible to aggregate large numbers of DERs into “virtual power plants.” By using information technology to coordinate the behavior of a large number of distributed devices, an aggregator can effectively make them behave like a single, large, predictable source.

It sounds great that new technology allows DERs to supply electricity to the wholesale market. This will make electricity markets more competitive, and I can’t think of any compelling reason that Republicans should hate the idea of FERC recognizing this. Well, I can think of one: it involves a regulation proposed under the Obama administration.1 Will that be enough to kill it? Stay tuned.

1Plus it’s kind of vaguely carbon friendly and therefore kinda sorta associated with climate change. So I guess that’s two reasons.

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