Distributed energy resources have been almost exclusively deployed and operated under a decentralized decision-making process. In this paper, we assess the evolution of a power system with centrally planned utility-scale generation, transmission, distribution, and distributed resources. We adapt a capacity expansion model to represent both centralized and decentralized decision-making paradigms under various electricity rate structures. This paper shows that a centralized planning approach could save 7% to 37% of total system costs over a 15-year time horizon using a Western United States utility as a case study. We show that centralized decision-making deploys substantially more utility-scale solar and distributed storage compared to a decentralized decision-making paradigm. We demonstrate how a utility could largely overcome the complications of decentralized distributed resource decision-making by incentivizing regulators to develop electricity rates that more closely reflect time- and location-specific, long-run marginal costs. The results from this analysis yield insights that are useful for long-term utility planning and electric utility rate design.
}, year = {2020}, journal = {Applied Energy}, volume = {269}, month = {07/2020}, url = {https://www.sciencedirect.com/science/article/abs/pii/S0306261920305833}, doi = {https://doi.org/10.1016/j.apenergy.2020.115071}, note = {This is a pre-print copy, printed with permission, of an article published in Applied Energy. The published version can be found here.
}, language = {eng}, }