Technologies like PV, EV, storage and electricity market ancillary services like Demand Response, Extended reserves etc. have started proliferating. Commercial and regulatory framework needs to align with these developments.

 In this paper we demonstrate a framework for a distribution system operator (distributor) to schedule distributed energy resources (DER) with the ‘time value’ concept being formulated in the objective. The non-monetary ‘time value’ represent the accumulated time that a deferrable device has been staying in the system to provide operational support without affecting customer satisfaction. The ‘time value’ pricing avoids impractically estimating the cost for a delayed or interrupted service, but still achieves effective load shaping. Marginal values from the optimal schedule are expressed in terms of the ‘time value’, which can be reconciled to the annualized investment cost savings for DER pricing purpose. Distributor is able to get an overview of a large scale of devices’ availability and their likely distribution grid impact over time.

The framework above is in line with California’s Locational Net Benefit Analysis (LNBA), which evaluates DERs’ benefits at specific locations is one of several new analytical methods needed to achieve the future envisioned in the Demand response Program - one where DERs are deployed at optimal locations, times, and quantities so that their benefits to the grid are maximized and utility customer costs are reduced. The genesis of the LNBA is Assembly Bill (AB) 327 of 2014, which added section 769(b) to the California Public Utilities Code.

California’s LNBA approach appears to be much more sensible, similar to requirements from Commerce commission for reliability measures of EDB’s for their 5 year Asset Management Plan (AMP). This paper will illustrate LBNA methods for demonstrated implementation for such an approach be though for New Zealand or Australia in the context of its current pricing and regulatory structures.