Published 
Jun 11, 2024

NYISO’s DER Participation Model: a Win-Win for Energy Users and the Grid

Unlock Revenue with NYISO's DER Participation Model

NYISO’s DER Participation Model: a Win-Win for Energy Users and the Grid
Angel Fernandez Amores
Director of Energy Markets - NYISO

NYISO is taking a giant regulatory leap forward by launching the Distributed Energy Resource (DER) Participation Model, an initiative aimed at facilitating the transition to a more reliable and cleaner grid by connecting low to zero emissions DERs to wholesale electricity markets. This change benefits businesses, grid operators, and DER aggregators. Here’s what energy users need to know:

  • The DER Participation Model gives DERs access to more market opportunities, which means more potential revenue for participating organizations. 
  • The aggregation threshold has been reduced to 100 kW giving more DERs access to these cash generating market opportunities.   
  • Voltus is 1 of 3 NYISO-approved DER aggregators that is eligible to give resources access to the DER Participation Model.
  • Voltus pioneered providing customers access to NYISO’s Ancillary Services market at scale, enrolling nearly 300 MW since 2021. Under the DER Participation Model, the Demand-Side Ancillary Services Program (DSASP) will no longer be available as a stand alone program. Customers have until April 16, 2025 to determine if they want to continue to participate as a fast-response resource within the DER Participation Model construct.

Understanding the DER Participation Model

The DER Participation Model simplifies market participation by offering resources access to all market programs under a single registration. Unlike the previous model where owners of DERs had to choose between participating in the Energy market or the Ancillary Services market, the DER Participation Model enables co-optimization across the Energy, Ancillary Services, and Capacity markets. This streamlined approach offers participants greater flexibility and access to multiple revenue streams.

Why is NYISO doing this?

The new DER Participation Model supports the state of New York’s goal to double distributed energy generation over the next 30 years by providing more DERs access to these wholesale electricity market programs. The DER participation Model also supports the state’s goal of having 70% of electricity generated through renewables by 2030. DERs can be leveraged by grid operators to smooth out the variability of renewable energy resources like wind and solar, supporting grid reliability as these intermittent resources are introduced to the supply stack at scale.

Under this model, DERs must meet a 10 kW minimum threshold. Although this means some small energy producers can't join yet, NYISO and energy advocates believe it’s a solid starting point. It’s anticipated that over time, NYISO will lower this threshold, allowing smaller DERs to contribute.

Does this change impact customers currently enrolled in the Special Case Resource program?

If you're participating in the Installed Capacity market through the Special Case Resource (SCR) program, your contribution might be valued less due to the NYISO-implemented Capacity Accreditation Factors. Transitioning to the DER Participation Model could allow your business to realize more value for this contribution. 

Factors influencing your earnings 

  • New Load Eligibility: Under the DER Participation Model, your eligibility is determined by your load profile. Resources whose load profiles align with NYISO’s peak load hours throughout the year stand to benefit the most.
  • Regional Variations: The zone you operate in plays a significant role in determining revenue potential. 
  • Trade Off Considerations: Participants need to weigh the tradeoffs between SCR capacity earnings and potential earnings from wholesale markets under the DER Participation Model.

Does enrolling in the DER Participation Model make sense for you?

Understanding your load profile, response time capabilities, and opportunity costs are crucial to determining whether you should enroll in the DER Participation Model. Facilities or sites with load patterns peaking before noon and manual curtailment processes are less likely to benefit from transitioning to the DER Participation Model compared to those with mid-afternoon to evening load peaks and automated curtailment processes. See the graphs below to see which load profile best resembles your operations. 

 

Conversations to have with your current demand response provider

Owners of DERs should engage in discussions with an approved DER Participation Model provider like Voltus to navigate this transition.

  • Will my current earnings be impacted by this change?
  • What should I do with my current program enrollments (confirm your plan before the April 16th, 2025 forced migration)?
  • How can I maximize my revenue through this new program?

Voltus stands apart as a NYISO demand response partner

As the only approved DER Participation Model provider who has enrolled Operating Reserves resources at scale, Voltus stands out as a trusted partner in this transition, offering:

The DER Participation Model opens doors to new opportunities for participants and aggregators alike. By understanding the key factors impacting earnings and engaging with experienced partners like Voltus, stakeholders can navigate this transition successfully and thrive in the evolving NYISO DER landscape. 

Questions? Contact info@voltus.co