The Walk stage represents the current state of distribution utility grid modernization and reliability investments currently underway or soon to be made in most U.S. states except for California and Hawaii. In this stage, the level of customer DER adoption is low and can be accommodated within the existing distribution system without material changes to planning, infrastructure or operations. The Walk stage is where distribution systems were over 10 years ago with very little automation beyond a substation and largely analog systems. At this stage, states need to first identify the capacity to add DER on the existing infrastructure and lay out a plan for expansion of DER in the future.
The Jog stage is where DER adoption reaches a threshold level of roughly 5% of peak load and requires significant changes to grid capabilities and operations as well as the potential to realize material system benefits. Bi-directional power flows will begin on high-penetration DER circuits. In response, more advanced control technologies and operations capabilities will be required to manage these parts of a distribution grid in a safe and reliable manner. Distribution utilities can source services from flexible DER to support reliable operation or as qualified alternatives to traditional investments. A key part of the Jog stage is the narrow need to consider DER procurement mechanisms of the distribution operator. Thus, Jog “markets” would have a single buyer – the distribution operator – and would not involve energy transactions that could raise federal/state jurisdictional issues. But in order for DER services to be transacted, a set of complex issues regarding telemetry data and data exchange standards need to be addressed. With DERs frequently not being owned or controlled by utilities but with utilities having the legal obligation to serve all customers and meet reliability targets, important bi-directional exchanges of real-time operating data need to be exchanged between utilities and DER providers.
The Run stage enables a combination of high DER adoption and advanced policies supporting distribution system markets with multi-sided transactions (“many-to-many” or “peer-to-peer”). Stage 3 is conceptually when DER providers and “prosumers” go beyond providing services to the wholesale market or distribution utility and engage in transactions with each other. This, of course, requires regulatory changes to allow retail energy transactions across the distribution system, including transactions that are still within a local distribution area (LDA) defined by a single T-D interface substation, thus not relying on transmission service. Enabling such a multi-sided market will require a formal distribution-level market structure to facilitate peer-to-peer energy transactions. In this environment, the distribution system operator role may evolve from the “one-to-many” coordination predominant in the Jog stage to an enabler of “many-to-many” physical coordination, with financial clearing and settlement.