Regulatory Design for Disruptive Technologies in the Power Sector: Examples from the U.S. and Implications for Thailand

Driven by cost declines and growing consumer desire for control of their energy needs, policies and regulations that promote DER deployment are changing the way electricity is produced and consumed and opening up opportunities for new business models to propagate. In the United States, the regulatory design for disruptive technologies in the power sector has evolved over time. The Reforming the Energy Vision (REV) policy in New York, for example, aims to create a more decentralized and customer-centric energy system. The policy encourages the development of distributed energy resources, such as solar and energy storage, and promotes the use of advanced technologies to manage the grid. The California Public Utilities Commission (CPUC) has also implemented policies to promote the growth of DER. The Self-Generation Incentive Program (SGIP) provides incentives for customers to install on-site energy storage systems, while the Customer Grid-Supply Program (CGS) allows customers to sell excess energy back to the grid. In Thailand, the Energy Regulatory Commission (ERC) is at the beginning stage of designing regulations to prepare for the growth of disruptive technologies, in particular DER. The ERC intends to facilitate the growth of DER through well-designed regulations that are mindful of economic, equity, and technical implications for the electricity sector. The report highlights the importance of harmonizing the vision, objectives, and integrated DER planning in national plans. It also recommends clarifying the role of utilities in disruptive technology deployment and stepping up the roles of distribution utilities through performance-based incentives. Additionally, the report suggests designing tariff rates driven by system conditions and determining fair compensation for distributed photovoltaics (DPV). The report also emphasizes the need to encourage the pairing of solar and BESS systems to pave the way for peer-to-peer (P2P) trading. Furthermore, it recommends laying down the foundation for EV smart charging and adopting relevant equipment standards and codes. The report concludes by highlighting the importance of putting it all together to build a path forward for all stakeholders. The growth of DER presents both opportunities and challenges to the electricity sector in Thailand. On the one hand, DER can provide benefits such as reduced greenhouse gas emissions, improved energy security, and increased customer choice. On the other hand, DER can also pose challenges such as grid stability, reliability, and fairness across stakeholders. To address these challenges, the ERC needs to design regulations that are mindful of economic, equity, and technical implications for the electricity sector. The regulations should promote the growth of DER while ensuring grid safety, reliability, reasonable electricity prices, and fairness across stakeholders. The report provides an overview of key regulatory designs in the U.S. and implications for Thailand, highlighting the importance of well-designed regulations to facilitate the growth of DER in Thailand. The report also highlights the importance of stakeholder engagement and collaboration in designing regulations for DER. The ERC should engage with various stakeholders, including utilities, policymakers, energy regulators, academics, and the private sector, to gather their perspectives on barriers to the growth of DER and the need for future regulations. In conclusion, the report provides an overview of key regulatory designs in the U.S. and implications for Thailand, highlighting the importance of well-designed regulations to facilitate the growth of DER in Thailand. The report emphasizes the need for harmonizing the vision, objectives, and integrated DER planning in national plans, clarifying the role of utilities in disruptive technology deployment, and stepping up the roles of distribution utilities through performance-based incentives.