Developing a Framework for Valuation of Grid Services

Abstract

The electric system is rapidly evolving and growing, raising new questions about how to define and value grid services delivered by a diverse set of resources, including customer-owned assets. This report advances a service–parameter–value framework that links what a grid service does to why it matters, and how its benefits are evidenced. We build upon prior efforts (Bender et al. 2021) and extend them to include value categories (reliability, resilience, cost & access, and security) with primary and secondary tiers, service-specific value streams that explain how benefits materialize, and metrics that make valuation traceable and comparable. We apply the framework to the six core grid services defined in (Kolln et al. 2023): Frequency Response, Regulation, Reserves, Energy, Voltage Management, and Blackstart and demonstrate it on three use cases to highlight the adaptability of these value streams. Further, we outline how the framework integrates with existing tools such as asset optimization, hosting capacity and cost-benefit analysis, and propose a path to portable qualifications and consistent stacking rules for use in tariffs and filings. Finally, we identify future pathways for research and application research needs to support standardization and decision-ready comparisons across services, assets, and architectures.