International Law on Distributed Energy Resources.

This chapter examines the nature, scope, and conceptual framework of distributed energy resources (DERs), and the characteristic of the law needed to regulate the new electricity paradigm. It discusses how a new paradigm of electricity generation and distribution based on demand response (as opposed to the traditional system based on supply response) is altering the scope of energy law and policy. By demand response, current legislation in many jurisdictions understands the ability of consumers (demand) to change their behaviors due to changing market conditions (price, source, time of the day, etc). Demand response aims to reduce generation needs, reduce electricity prices, improve efficiency, and contribute to the security and reliability of electricity systems by reducing power outages. Demand response is possible thanks to new digital technologies and techniques (smart grids and smart metering) and the automation of production and consumption processes. Due to these new techniques, the consumer knows what the price of electricity is at every moment. A wide range of environmental, social, and economic challenges arise in the implementation of DERs, which if not holistically addressed could limit their full potential to advance a secure and sustainable energy future. The rising focus on DERs across the world means that the sustainability of future electricity systems will be governed by four key vectors of transformation (the four ‘Ds’): (a) Decarbonization; (b) Decentralization; (c) Digitalization; and (d) Democratization. The chapter provides foundational information on DERs and the fundamental sustainability questions relating to the 4Ds that DER programs raise.