This is part five of our six-part DERMS series. If you missed the previous part, it can be found here:
Part 5: DERMS for transmission and distribution operators
Benefits of DERMS for TSOs
The benefits of managing distributed energy resources (DER) have long been recognized by transmission system operators (TSO). In addition to non-wires alternatives to transmission reinforcement, DER management can be used to help maintain the required continuous balance between electricity production and consumption to maintain system frequency. System frequency control becomes more onerous as variable renewable energy sources displace conventional synchronous power plants.
The displacement of conventional transmission-connected power plants with distributed generation (DG) also affects the reactive power control requirements on transmission networks, impacting system voltage control and reducing system inertia.*
*Reduced system inertia results in faster rates of change of frequency when events such as loss of generation or faults occur on the network. This can increase the risk of system frequency stability issues. The system-connected generation and associated rate of change of frequency (ROCOF) protection need to be capable of dealing with faster rates of frequency change. Alternatively, the TSO must procure alternative sources of inertia support, e.g., synthetic inertia from converter-based technology associated with DESS, static var compensation systems, synchronous or hybrid condensers, etc.
In the future, TSOs will look more and more to distribution-connected customers via the distribution system operator (DSO) for DER support services such as demand side management (DSM), reactive power services, fast frequency, frequency, inertia, black start and generation curtailment services, etc. DERMS is an enabler that would allow the DSO and/or other players like aggregators to provide the TSO with access to DER-based TSO support services while ensuring their distribution network remains within design and statutory performance limits.
DERMS could also be used by the DSO and/or aggregator to enable distribution-connected customers to trade in wholesale power markets as well as TSO ancillary services markets. In some countries, these DSO-facilitated services are now being considered by DSOs, TSOs, technology investors and regulators. It should be noted that the DSO network itself can support TSO voltage control via transformer tap changers, line voltage regulators and capacitive compensation on the DSO network, as well as voltage control support from DER. The combination of an advanced distribution management system (ADMS) and integrated DERMS can assist the DSO in providing voltage control support to the TSO.
DERMS control and commercial arrangements
DER control can take numerous forms. A DERMS identifies when and where network constraints will occur and sends out instructions to DER that will avoid such network constraints. Depending on the DER’s registered characteristics, real and reactive power import and export may be controllable. Instructions to control DER can be sent through various media including the DSO’s communication system to a customer interface controller or via other routes such as the internet. Control instructions or requests may be sent to third parties such as aggregators who then control the DER as instructed. The concept of issuing price signals via smart metering infrastructure (AMI) has also been proposed.
DERMS control may be local (e.g. active network management (ANM) at specific primary substations on the DSO network), centralized in a control room where the DERMS monitors the whole DSO network or it could be a hybrid of both these system types.
The commercial arrangements for DER management are important and need to consider the incentive for DER participation to address forecast DER requirements and the economic benefits compared with other network constraint solutions. There is a requirement to forecast network constraints long-term with no intervention as a baseline and to forecast network constraints and DER capacity for operational purposes, which could be monthly, weekly, daily, intra-day, etc.
The development of suitable commercial trading arrangements for DER flexibility could include bilateral agreements with customers or aggregators, new trading platforms for flexibility services or other arrangements-based on blockchain concepts. These commercial arrangements are continuing to develop in several countries as DER management is utilized as a non-wires alternative to network reinforcement, or for support services to TSOs from the distribution networks as DG displaces transmission-connected power plants.
Figure: An effective DERMS can have positive impacts in many areas
Benefits of DERMS for DSOs
The largest value pools for advanced DERMS capabilities for DSOs are found in improved grid planning and the reduction of grid reinforcement needs.*
*There is a difference between grid expansion and reinforcement. Expansion relates to extending the reach of the network for new connections while reinforcement is increasing the capacity of the existing network. DERMS can avoid reinforcement but not expansion.
Data gathering and advanced analytics combined with cost/benefit analysis (CBA) allow for optimization of grid reinforcement planning. The use of load and generation curtailment for a limited number of hours in the year can maintain networks within their thermal and statutory voltage limits, avoiding or deferring the need for expensive reinforcements to accommodate new DG such as photovoltaic (PV) and demand such as electric vehicles (EV). This is particularly true for higher-distribution voltages where the network may have designed in redundancy to allow for the unexpected loss of a circuit. Where redundant capacity is used for peak hour operation rather than building more network capacity, the need for demand or generator curtailment would only occur when there is an unexpected circuit outage during peak operational hours, which is likely to be a low-risk occurrence. Depending on the regulatory system in which the DSO operates, this alternative to network reinforcement can offer financial benefits to the DSO and customers.
Available policy options include flexibility procurement and tariff setting. These policy options provide both supply- and demand-side flexibility including renewable energy sourced (RES) curtailment schemes that avoid reverse power flow issues and enable peak supply shaving and load shifting and reduction. In addition, the policy covers increasing demand when supply is high to provide peak flow shaving. Since information is a prerequisite for the activation of flexible demand schemes, data handling policies for technical data from smart meters allow for better investment planning. The above results in deferring or avoiding grid investments by increasing hosting capacity rather than reinforcing existing infrastructure.
A second value pool may also be available to DSOs by providing support services to the associated TSO. Based on earlier discussions, TSOs in countries transitioning from fossil fuel generation sources to renewable generation are likely to require support services from the DSO network and the flexible DER customers on that network. Support services can include reactive power for transmission voltage control and real power for frequency control. Where conventional, transmission-connected, synchronous power plants are displaced by renewable DG sources such as wind and solar, the TSO may also have future requirements for black start and inertia support, some of which may be sourced from the DSO network. DERMS is an enabler that would allow the provision of support services to the TSO and could offer commercial benefits to the DSO as an aggregator or facilitator of support and ancillary services to the TSO.
Finally, regardless of whether the value pool is from avoided or deferred distribution system reinforcement or support services to the TSO, advanced insights into consumption and production patterns allow forecasts that are more accurate and will improve the effectiveness of DERMS based solutions and services.
It should be noted that DER management can also avoid or defer expensive transmission network reinforcement for the TSO. The relationship between the TSO and DSO in many countries is becoming more important in terms of the economics of delivering power to customers where DG is displacing traditional transmission connected power plants. The rules that govern this TSO/DSO interaction may require amendment in some countries to ensure overall economic benefit to customers of the electricity networks.
In part six of our six-part series, we will discuss DERMS use cases and pilot projects.