Leadership at Voltus believe the New York Independent System Operator’s (NYISO) Distributed Energy Resource (DER) Participation Model can be a “proving ground” for similar demand response initiatives across the country, company executives told NPM in a recent interview.

Voltus, a virtual power plant (VPP) operator, announced in late March that it registered its first resource to participate in NYISO’s new DER Participation Model. Voltus typically works with C&I customers to participate in demand response programs when the grid is stressed, but more recently has been growing its offerings to include selling generated megawatts into energy markets.

The NYISO model essentially overhauls how DERs are paid for energy they feed to the grid. The model can increase the value of a megawatt by nearly 50% compared to traditional programs like New York City’s Special Case Resources (SCR) Program.

Voltus registered TeraWulf’s Lake Mariner data center campus with National Grid under the DER Participation Model. The company expects to shift a number of customers participating in legacy programs gradually over to the new model, Voltus Vice President of Energy Markets Emily Orvis told NPM. The company plans to complete integrations with additional transmission owners, including ConEdison, Orange & Rockland, NYPA, NYSEG, and Rochester Gas & Electric, in the coming months.

“The DER participation model is a way for distributed energy resources to enroll as resources to participate in the New York wholesale market and compete directly against generators,” Orvis said in a recent interview.

Demand response resources are typically paid for capacity by participating in special programs that are only for demand response, while other generators are paid for capacity by meeting a “must offer” requirement in the energy market.

“They’re not doing something different to provide capacity, they’re just providing energy. And if they provide that in the right way, they get accredited for capacity,” Orvis said. “That’s the switch that we’re going through here. Traditionally, demand response resources in New York have been paid for capacity by enrolling in the Special Case Resources Program, but now they will enroll in the DER Participation Model, and if they offer the energy market in the right set of hours and perform as required, they will be accredited for capacity, and then they can sell that capacity into the same auction that special case resources sell into or that generators sell into.”

In short, the new model lets DERs get cost-based offers for the energy they provide to the grid, the same way a coal or gas generator would.

Orvis said Voltus has seen a lot of pricing volatility in demand response programs, in addition to changes in program parameters, across the country recently. As a result of the need for more electric capacity across markets, resources and demand response programs are under enhanced scrutiny, Orvis said.

“There’s just more and more stringent testing requirements, paperwork requirements, were subject to more frequent dispatches and dispatches at different times than they used to be. There’s a lot of upside to more responsive loads, but the industry is moving towards paying resources that are available more frequently, quicker and more responsive to grid needs,” Orvis said. “We’re moving away from carved out programs that gave really special treatment to demand response, towards, if we want to get paid the same as other sources of capacity, we’re going to have to be subject to the same level of response.”

New York’s DER Participation Model represents the most advanced example of demand response program shifts Voltus is seeing. Since the SCR Program is only called in emergency conditions or to avoid emergency conditions, the new model will get more DERs actively participating in the system, Orvis said.

Getting across the finish line for its first registered resource wasn’t easy. Orvis said resources that participate in energy and ancillary services must have real-time telemetry signals between Voltus and NYISO to monitor load level. With the new DER Participation Model, Voltus needs those integrations with individual utilities in addition to NYISO. Voltus has built four such utility telemetry integrations so far, which Orvis said took dozens of engineers several months.

“We’ve definitely had a lot of heartache going live in this new model in New York. It’s been very technically difficult,” Orvis said. “But it’s felt very worth it to me, because this is the direction that I think the industry is moving in, so it’s been good to learn and it’s good to have a proving ground.”