Benefit-Cost Analysis for Distributed Energy Resources

Advanced Energy Economy Institute
Project completed October 2014.

In its Reforming the Energy Vision proceeding, the New York Public Service Commission has undertaken an ambitious initiative to improve the New York electricity system through better incorporation of distributed energy resources (DERs): distributed generation, distributed storage, energy efficiency, and demand response. To support this initiative, Synapse developed a benefit-cost analysis framework that will provide the Commission and other stakeholders with the information necessary to determine which resources will be in the public interest and will meet the Commission’s energy policy goals. This DER benefit-cost analysis framework outlines the methods for identifying, valuing, and monetizing costs and benefits associated with DERs, including those that have traditionally been hard to quantify, and thus previously ignored. The framework also discusses how to account for the risk mitigation benefits of DERs, and provides guidance regarding the appropriate discount rate to use for evaluating distributed energy resources to meet state energy policy goals.

On October 2, Tim Woolf presented the framework in a webinar. The slides are available below; the full recording with audio can be accessed here.