Research

Distributed Capacity Procurement: Unlocking Grid Value with Utility-Led DER Deployment

Utilities can develop distributed capacity procurement (DCP) to build and operate utility-planned, directly managed distributed energy resources (DERs).
Initial DCP plans focus primarily on siting dispatchable assets, such as battery energy storage systems (BESS) at non-residential utility customer sites.
DCP quickly provides capacity for serving new loads and transforms how utilities approach grid modernization, strategically deploying DERs where they are most beneficial
DCP offers flexibility in DER asset ownership structures, potentially deepening customer engagement with a simplified DER experience.

DCP is a model for utilities to procure and utilize DERs at scale. Through DCP, utilities plan, deploy, own, and manage customer-sited DERs based on where they can provide the most grid value. Bringing customer-sited DERs into the core of utility planning and procurement transforms these assets into a scalable new source of verifiable, firm, and dispatchable capacity and infrastructure resources. Utility ownership and management provide the operational trust, safety, cybersecurity standards, and certainty of a utility-controlled resource.

This white paper is a collaboration between SEPA and Sparkfund and aims to:

Introduce and define the DCP model.
Clarify how DCP compares to and differs from traditional virtual power plants, demand response, and demand-side management programs.
Describe how utility-led DERs can serve as grid-scale planning, infrastructure, and capacity resources.
Outline the economic case for DCP.
Provide a roadmap for utilities and regulators to implement DCP.

Authors and Contributors

Lakin Garth, Senior Director – Grid Strategy, SEPA
Allison Wannop, Policy Director, DER Task Force
Pier Lafarge, CEO & Co-Founder, Sparkfund