Locational Marginal Value of Distributed Energy Resources as Non-Wires Alternatives

In this paper, we address the issue of valuating Distributed Energy Resources (DERs) as Non-Wires Alternatives (NWAs) against wires investments in the traditional distribution network planning process. Motivated by the recent literature on Distribution Locational Marginal Prices, we propose a framework that allows the planner to identify rigorously the short-term Locational Marginal Value (LMV) of DERs using the notion of Marginal Cost of Capacity (MCC) of the best grid investment alternative to monetize hourly network constraint violations encountered during a yearly rate base time scale. We apply our methodology on two actual distribution feeders anticipated to experience overloads in the absence of additional DERs, and present numerical results on desirable LMV-based generic DER adoption targets and associated costs that can offset or delay different types of grid wires investments. We close with a discussion on policy and actual DER adoption implementation.