The Value of Resilience for Distributed Energy Resources: An Overview of Current Analytical Practices

Recent extreme weather events, natural disasters, and cyber incursions have brought the vulnerability of the electric system into sharp focus. These events have demonstrated that planning for long-duration power interruptions caused by high-impact, low-probability events will require new approaches to power system resilience above and beyond previous hardening efforts. At the same time, the rapid growth and declining costs of distributed energy resources (DERs) such as microgrids, solar photovoltaics, and batteries have introduced new technology options for energy resilience. Consequently, state policymakers across the country have established electricity resilience policies and programs, with several states focusing specifically on resilient DERs as part of clean energy programs and grid modernization efforts. Although it is clear that DERs offer resilience benefits, it is unclear how to determine the value of those benefits. Identifying appropriate methodologies to calculate the value of resilience will be an important step toward ensuring that resilient DERs are considered alongside alternatives and integrated into future energy infrastructure and investment planning efforts. This paper reviews current practices for calculating the value of resilience with a focus on valuing resilient DERs installed within the distribution system. It examines both regulatory decision-making and non-regulatory cost-benefit analyses in order to determine if, and how, a value of resilience was calculated and applied. The paper is designed to address questions that utility regulators have identified as being of interest: (1) Have regulators identified and utilized a value of resilience in regulatory decisions related to resilient DERs? (2) Is the value of resilience being used to analyze resilient DERs in venues other than regulatory proceedings? (3) What are the different methods to value energy resilience? (4) What are the pros and cons of different methods used to value resilience? (5) Can regulators adopt or improve value of resilience methods to support their decisions?