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Distributed Energy Resources (DER) are small electricity generation or energy management technologies located close to where electricity is consumed.
Unlike traditional power plants that produce electricity at large centralized facilities, distributed energy resources operate within the distribution system or directly at customer locations.
DER technologies are becoming increasingly important as electricity systems evolve toward more decentralized and flexible energy systems.
Distributed Energy Resources produce or manage electricity at or near the point of consumption.
They allow electricity to be generated, stored, or controlled locally rather than relying solely on large centralized power plants.
Several technologies are commonly considered distributed energy resources.
Small solar installations using PV (Photo-Voltaic) technology can generate electricity on rooftops or at small solar sites.
These systems convert sunlight directly into electricity and may export excess electricity to the grid through programs such as Net Metering.
Battery systems store electricity and release it later when needed.
Energy storage can help:
Battery systems are often installed at commercial facilities or integrated with solar generation.
Demand Response programs allow electricity consumers to temporarily reduce electricity use during periods of high system demand.
Demand response helps balance electricity supply and demand without building new generation facilities.
Electric vehicles represent both a new electricity demand and a potential distributed resource when managed through smart charging technologies.
Facilities may generate electricity on-site using CHP (Combined Heat and Power) systems that simultaneously produce electricity and useful thermal energy.
Distributed energy resources connect primarily to the distribution system operated by Local Distribution Companies.
Electricity generated by DERs may:
Coordination between DERs and the broader electricity system is increasingly important for maintaining system reliability.
Groups of distributed energy resources may be aggregated into a Virtual Power Plant (VPP).
A virtual power plant coordinates multiple distributed resources to operate collectively as a larger electricity resource.
This allows small distributed technologies to participate in electricity markets and provide grid services.
Distributed energy resources are transforming how electricity systems operate.
DERs can:
As DER adoption increases, electricity system operators such as the Independent Electricity System Operator (IESO) must coordinate both centralized and distributed electricity resources.
Distributed Energy Resources (DER)
Small electricity generation, storage, or demand-management technologies located close to electricity consumers and connected primarily to the distribution grid.
➡ Next Topic:
Electricity Market Overview
Understanding distributed energy resources helps explain how modern electricity systems are becoming more decentralized and flexible.
The next topic introduces how electricity markets coordinate electricity supply and demand across the system.
Last Updated: 2026-03-26