New England Grid Operator Opens Wholesale Markets to Smaller Distributed Energy Resources

ISO New England on Nov. 2 stated that it has started allowing aggregations of distributed energy resources, or DERs, to participate in its wholesale electricity markets starting Nov. 1, enabling smaller energy assets to compete alongside traditional power generators. The new framework opens access to the region’s capacity, energy and ancillary services markets for combined resources such as solar, battery storage, wind, demand response and electric vehicles with controllable charging systems.

The change implements Federal Energy Regulatory Commission’s Order No. 2222, which requires regional grid operators to allow groups of DERs to provide wholesale electricity services they are technically capable of delivering. These services include supplying electricity, reducing demand, managing electricity consumption and helping balance the grid.

Previously, smaller distributed resources often faced barriers to market participation because they could not individually meet minimum size and performance requirements. Under the new arrangement, multiple resources can combine their capabilities and participate as a single market entity. Companies known as aggregators will register these groups with ISO New England and coordinate their participation. Depending on their physical and operational characteristics, aggregations may qualify under different market participation models.

The development builds on the grid operator’s existing efforts to integrate distributed resources into wholesale markets. The ISO’s earlier participation models have already enabled thousands of megawatts of larger DERs to participate. However, smaller assets remained unable to access the markets independently because of eligibility requirements.

ISO New England developed the new framework through a stakeholder process involving affected entities across Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

Other regional grid operators have also advanced DERs participation in wholesale electricity markets. The New York Independent System Operator launched its DER participation model in April 2024, while the California Independent System Operator completed its compliance framework in November 2024. These initiatives reflect a broader effort to expand wholesale market access for smaller energy resources and enable them to compete alongside conventional power generators.