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A New Model for Valuing Distributed Energy Could Drive Big Changes in California

July 24, 2020

A new model for calculating the value of distributed energy resources (DERs) could lead to big changes in the biggest U.S. state’s energy market.

This spring the California Public Utilities Commission (CPUC) approved changes (PDF) to its Avoided Cost Calculator. The ACC creates hourly values representing “marginal costs a utility would avoid in any given hour if a distributed energy resource avoided the provision of energy during that hour” — a key measurement of the value of DERs to the state’s electricity grid, calculated over a 30-year time horizon for each utility and climate zone in the state.

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