UPSC Prelims 2024 Q27: Distributed Energy Resources — Explained

Consider the following:

1. Battery storage

2. Biomass generators

3. Fuel cells

4. Rooftop solar photovoltaic units

How many of the above are considered "Distributed Energy Resources"?

  1. Only one
  2. Only two
  3. Only three
  4. All four

Answer: (d) All four

Statement-wise explanation

  • 1: correct — Battery storage counts as a distributed energy resource (DER) when it sits in a home, a business or a local substation on the distribution network. The US regulator FERC's Order No. 2222 (2020) defines a DER as any resource on the distribution system or behind a customer's meter, and it names electric storage resources in that definition. The OECD's 2022 report 'Unlocking the Potential of Distributed Energy Resources' gives battery storage as a common example. A DER does not have to generate power. Storing it and releasing it close to the user is enough.
  • 2: correct — Small biomass generators turn local organic matter (crop residue, wood, biogas) into electricity or heat near where it is used. They are a form of distributed generation, which is the largest group of DERs. What makes something a DER is its small scale and its place in the grid, near the consumer and on the low-voltage network. The fuel it uses does not matter.
  • 3: correct — A fuel cell makes electricity through an electrochemical reaction, usually between hydrogen and oxygen. It does not burn anything. Fuel cells are modular and can be placed at a building, campus or telecom tower, so they are a standard example of distributed generation. The fuel can be hydrogen, natural gas or biogas, and it is still a DER because of where and at what scale it runs.
  • 4: correct — Rooftop solar PV is the best-known DER. The power is produced on the consumer's own roof, behind the meter, and any surplus goes into the local distribution grid. The OECD report names rooftop solar PV first among common DERs. India's PM Surya Ghar: Muft Bijli Yojana (approved February 2024, outlay ₹75,021 crore) aims to put rooftop solar on one crore households.

How to eliminate

You need to know what a DER is to solve this, but you only need the definition, not a list of technologies. A DER is any small generation or storage unit located near where the power is used and connected to the distribution (low-voltage) network or behind the meter. Rooftop solar is clearly a DER from basic knowledge. That rules out any answer that leaves it out, but on its own it does not decide the count. The trap is to treat 'energy resource' as meaning 'generator' and drop battery storage, which leads to 'only three'. Another trap is to drop biomass or fuel cells because they burn or use a fuel. Once you remember that 'distributed' describes location and scale, not the technology or fuel, all four fit. Fact to remember: DER = distributed generation + storage + demand-side resources, sited at or near the consumer.

Know more

Distributed Energy Resources (DERs) are small energy units located at or near the point of use. They connect to the low-voltage distribution grid or sit behind the consumer's meter. The opposite is a centralised system, where large plants (coal, big hydro, nuclear, utility-scale solar parks) send power over long high-voltage transmission lines.

Three families of DERs

Family Examples What it does
Distributed generation Rooftop solar PV, small wind, biomass/biogas gensets, fuel cells, micro-turbines, diesel gensets, small hydro Produces electricity locally
Storage Home or community batteries, EV batteries, thermal storage Shifts energy in time
Demand-side resources Demand response, smart meters, energy-efficiency measures, EV chargers Changes when and how much power is used

Why DERs matter

  • Fewer transmission and distribution losses, because power is used where it is made.
  • Resilience: microgrids can keep running when the main grid fails.
  • A household becomes a prosumer, both producing and consuming power, often under net metering.
  • Challenges: reverse power flows, voltage swings and the need for smart inverters and DER aggregation.

Key terms

  • Behind the meter: equipment on the consumer's side of the utility meter, such as rooftop PV or a home battery.
  • Microgrid: a local grid of DERs that can work connected to the main grid or on its own (islanded).
  • Virtual power plant: many DERs pooled by software and run like one plant.

India context: PM Surya Ghar: Muft Bijli Yojana (2024) for rooftop solar; Viability Gap Funding for Battery Energy Storage Systems (Cabinet approval, 6 September 2023: 4,000 MWh by 2030-31, VGF up to 40% of capital cost); PM-KUSUM for decentralised solar pumps and plants on farms.

In the news

In September 2023 the Cabinet approved Viability Gap Funding for 4,000 MWh of battery storage. In February 2024 it approved PM Surya Ghar: Muft Bijli Yojana for rooftop solar on one crore households. Both put small-scale and decentralised power in the news before the 2024 Prelims.

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