Jan 26, 2023 · 46m · catalyst
The journey to monetizing DERs
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Host Shayle Kann and CPower executive Matthew Sachs explore how distributed energy resources (DERs) are aggregated, automated, and monetized across wholesale electricity markets. They examine the regulatory, economic, and technical shifts transforming edge-of-grid devices into flexible clean power assets.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Shayle holds 36.8% of the talking time here. How this is scored →
Shayle as informed peer 6.5 Guest teaching 4.5 Guest disagreement 1.6 Shayle pushing back 2.8
speaking balance: gold is Shayle, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 13:31 Sachs rejects Kann's assertion of unviable residential DER margins
Sachs explicitly counters Kann's claim that DER economics cannot support intermediaries, explaining how hardware cost declines and high-wattage loads make residential aggregation profitable.
Hardest push from Shayle ▶ 12:30 Kann presses on the burden of multiple intermediary marginsKann challenges the complexity of the aggregator stack, questioning whether extracting small amounts of value from household thermostats can survive three intermediaries taking slices of the pie.
Biggest teaching moment ▶ 15:15 Sachs demonstrates how residential and C&I loads complement the duck curveSachs explains how residential evening peak loads seamlessly mesh with daytime commercial loads to optimize the full area under the duck curve for grid operators.
Shayle holds their own ▶ 5:38 Kann formulates the precise distinction between DERs and demand responseKann demonstrates strong market domain expertise by refining the conversation, distinguishing physical responsive assets from wholesale demand response market structures.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Shayle as informed peer | Guest teaching | Guest disagreement | Shayle pushing back | Why |
|---|---|---|---|---|---|---|
| Framing the Distributed Energy Resource Vision | 6 | 3 | 1 | 2 | Kann establishes clear industry context and defines demand response as a market mechanism while DERs are physical assets. Sachs agrees and expands on how regulatory milestones like FERC Order 745 and 2222 evolved DR from peak shaving to full flexibility. | |
| The DER Monetization Stack and Aggregator Role | 6 | 4 | 1 | 2 | Kann asks Sachs to map out the vertical stack connecting behind-the-meter devices to grid operators. Sachs re-envisions the stack as a sandwich and details how aggregators mitigate performance risk and combine complementary seasonal loads across PJM. | |
| Economics of Residential DERs and C&I Load Balancing | 7 | 6 | 4 | 5 | Kann challenges the multi-intermediary aggregator model, arguing device economics are too thin to support multiple middlemen. Sachs pushes back, illustrating how cheap smart thermostats, higher watts per customer, and time-of-day synergy between residential evening peaks and C&I daytime peaks resolve margin issues. | |
| Grid Interconnection Challenges and Data Access Barriers | 6 | 5 | 1 | 2 | Kann probes whether DER monetization has simplified or remains stalled by implementation barriers. Sachs points out archaic data friction like wet signatures and AMI meter lock-in, and details the flaw of utilities modeling grid interconnection solely on static peak hours. | |
| Sponsor Break: Bloom Energy | 7 | 5 | 2 | 3 | After the sponsor break, Kann summarizes FERC Order 2222 and asks what has happened across ISOs since its passage. Sachs explains ISO filing statuses, pushback like MISO's proposed 2029 delay, and why overly granular nodal aggregation limits market participation. | |
| Evolution of DER Resource Portfolios and Building Automation | 6 | 4 | 1 | 2 | Kann asks if current DR megawatts remain skewed toward legacy C&I shutdown loads over newer automated assets. Sachs notes that while building automation systems act like batteries, non-industrial assets still only account for one-sixth of CPower's portfolio pending injection reforms. | |
| The Rise of Electric Vehicles and Managed Fleet Charging | 7 | 5 | 1 | 2 | Kann investigates managed charging (V1G) versus vehicle-to-grid injection (V2G) in vehicle fleets. Sachs highlights active school bus deployments and forecasts that DER grid services will triple to 100 GW by 2030, with EVs contributing 20-25%. | |
| Exponential Growth Trajectory and Market Pricing Dynamics | 7 | 4 | 2 | 4 | Kann contextualizes that DER adoption has lagged behind a decade of hype but may be reaching an exponential inflection point. Sachs agrees on growth trajectories while noting the challenge of unpredictable whack-a-mole regional market pricing across PJM and MISO. |
Statements from this episode (14)
Sachs: DERs Have Evolved Into the Grid's New Clean Peakers
“Originally I mentioned it earlier, it was really used to reduce seasonal peaks, and now we're seeing it used really to provide a full spectrum of flexibility services. Things to firm renewables, to respond to more frequent grid disruptions, or really it is the…”
Sachs: The industry will increasingly aggregate complementary DERs for capacity markets
“This is something that CPower's really been doing over the last five or six years, and I think more and more in the industry will get here, is this aggregation of kind of small pieces that, that couldn't, small pieces of load in DERs that couldn't That couldn'…”
Kann: Thermostat grid value cannot support multiple layers of intermediaries
“The amount of economic value you can extract from a thermostat in response to grid signals is not nothing, but it's not enough to allow for, you know, three different intermediaries to take a slice of the pie.”
Sachs: Residential demand response complements rather than competes with C&I load
“Resident demand response doesn't really compete with CNI demand response, because if you take the duck turf in California, when does it start? Four, five, six, all, all, all pretty big CNI load pockets, but when does it end? Say nine o'clock, right? Somewhere …”
Sachs: Aggregators often install redundant meters even where smart meters exist
“Where I do think it, there's issues is on the data side, right? There's a lot of redundant costs there where we have to often put in our own meter, even when there's a AMI deployed.”
Sachs: Many Utilities Still Require Wet Signatures for Data Access
“You know, for many utilities, you still need a wet signature, certainly a signature that's returned back to the utility.”
Sachs: Utilities base interconnection approvals on the worst-hour annual peak
“If you want to interconnect a battery or a solar panel or whatever to the utility today, they're going to look at the worst hour or when the most demand was on that line of the entire year and tell you if you're allowed to inject or not based on that.”
Sachs: All six RTOs filed FERC 2222 plans, but only two approved
“All six ISOs and RTO proposals have been filed with FERC. Two have approved, have been approved. That's New York ISO and Cal ISO. The other four are pending.”
Sachs: MISO requested to delay FERC Order 2222 implementation until 2029
“Things like MISO wants to delay implementation until twenty-twenty-nine.”
Sachs: NYISO will likely lead initial FERC 2222 megawatts over CAISO
“I would say New York will likely lead in, in megawatts initially, and this is more because New York has assets participating in, in programs that will be directly transferred in, namely their DSASP or their ancillary service markets.”
Sachs: Classic behind-the-meter demand response will dominate DERs for 5-10 years
“I think if you looked forward five, 10 years, you might start to see that, that split start to break down, although kind of going back to what I said before, I think until we really work out this injection piece, that, that demand response, classic demand resp…”
Sachs: US DER grid services will surpass 100 GW by 2030
“We believe that grid services will more than triple by 2030 to well north of a hundred gigawatts in, in North America, really the U.S.”