Energy technology allocation for distributed energy resources: A strategic technology-policy framework

Distributed energy resources (DER) are emerging rapidly. New engineering technologies, materials, and designs improve the performance and extend the range of locations for DER. In contrast, constructing new or modernizing existing high voltage transmission lines for centralized generation are expensive and challenging. In addition, customer demand for reliability has increased and concerns about climate change have created a pull for swift renewable energy penetration. In this context, DER policy makers, developers, and users are interested in determining which energy technologies to use to accommodate different end-use energy demands.In this paper, we present a two-stage multi-objective strategic technology-policy framework for determining the optimal energy technology allocation for DER. The framework simultaneously considers economic, technical, and environmental objectives. The first stage utilizes a production frontier estimation model for each end-use to evaluate the performance of each energy technology based on the three objectives. The second stage incorporates factor efficiencies determined in the first stage, capacity limitations, dispatchability, and renewable penetration for each technology, and demand for each end-use into a bottleneck multi-criteria decision model which provides the Pareto-optimal energy resource allocation. For demonstration purposes, we apply the framework to a dataset constructed for a typical commercial building located in the Northeastern United States and discuss the results.