Integrating Distributed Energy Resources into Wholesale Energy Markets


CSE teamed up with industry partners to test the ability of distributed energy resources to cost-effectively accomplish their main purpose of meeting on-site electricity needs while providing services to the grid.

Distributed energy resources (DERs), such as solar, wind and energy storage, present opportunities to optimize and balance California's electricity grid through demand response participation in wholesale energy markets.

The Center for Sustainable Energy (CSE) with subcontracted support from Olivine Inc., Tesla, Inc. (formerly Solar City, Inc.) Conectric Networks, LLC., and DNV-GL, led a multi-year technology demonstration pilot titled, “Meeting Customer and Supply-side Market Needs with Electrical and Thermal Storage, Solar, Energy Efficiency and Integrated Load Management Systems.” (EPC-15-074)

The project demonstrated how two behind-the-meter energy storage and DER technology portfolios could decrease customer utility bills through a combination of “active” and passive efficiency measures and onsite solar photovoltaic generation-to-storage while also earning revenue by direct participation in the California wholesale energy and ancillary services markets — as proxy demand resources.

Beyond providing day-ahead and real-time energy into the wholesale market, the project was among the first demonstrations of a resource behind-the-meter providing ancillary services via spinning reserves.

Read the Final Report


Program at a Glance

Program Goals

Develop a set of replicable strategies to expand participation of DERs in supply-side markets and enable more effective use of DER assets for all California ratepayers

CSE's Role

Oversaw and led project


Demand Response
Distributed Energy Resources
Energy Engineering
Energy Storage

Key Partners

Olivine Inc., Tesla, Conectric Networks, DNV GL

State Policies Supported

CAISO Energy Storage & Distributed Energy Resources (ESDER) Initiative, CPUC R1503011 Energy Storage Proceeding, CPUC R1309011 Demand Response Proceeding, CPUC R1211005 SGIP Proceeding

Impact Statement

Greater grid stability through higher penetration of renewable energy in California by integrating customer-sited DER systems that maximize their value to both host customers and wholesale market activities