This report is the second in a series of three reports on DER integration. See also the first report, DER Integration into Wholesale Markets and Operations, and the third report, The Transition to a High-DER Electricity System: Creating a National Initiative on DER Integration for the United States.
Distributed energy resources (DERs)—generation, storage, electric vehicles, and responsive load connected to the distribution system—can provide a range of economic, reliability, and security benefits to electricity systems. Unlocking these benefits, however, requires concerted and coordinated action among electricity regulators, electric distribution companies, bulk power system operators, retailers and other service providers, customers, and equipment manufacturers. ESIG’s report, Lessons Learned for the U.S. Context: An Assessment of UK and Australian Open Networks Initiatives, provides an assessment of recent DER integration initiatives in the UK and Australia, distilling insights that would be instructive for the development of a national initiative around DER integration in the United States.
UK Open Networks Project
The UK Open Networks Project, driven by the need for electricity power system decarbonization, digitalization, and decentralization, is an ongoing project exploring the steps necessary to deliver a more efficient and cost-effective clean energy system. The UK project brings together the electric grid operators, the energy regulator Ofgem, the UK government, academics, and industry trade associations. It seeks to enable the uptake of DER technologies in the UK by allowing customers to take advantage of these new technologies to lower their costs and provide flexibility for the grid through bidding for flexibility services to network operators.
The first year of work defined and developed eight key functions of a distribution system operator (DSO). It also created a roadmap for the evolution from traditional network operation to new DSO functions, including the steps that network and system operators need to take in the short, medium, and longer term. The UK Open Networks Project highlights the importance of nearer-term and longer-term balance, stakeholder engagement, and process agility.
Australia’s OpEN project
In Australia, world-leading DER adoption levels led to a need to ensure reliable operation in a high-variable-renewable, high-DER system. It also spurred a desire to better understand how network and market operators can facilitate innovation, encourage competition, and reduce barriers to entry into the system. Through the Australian Open Energy Networks (OpEN) project, energy industry stakeholders participated in a series of workshops, discussion papers, and a consultation to identify ways to facilitate increased DER integration and provide the building blocks for any future market framework.
In a three-year process, the Australian OpEN project identified least-regrets actions that distribution network service providers need to implement: to define network visibility requirements and constraints for DERs exporting power to the distribution system, create industry guidelines for DER operating envelopes for export limits, and develop communication requirements for dynamic DER operation.
Key Takeaways for the United States
This report discusses how the successes and challenges of the efforts in Australia and the UK can provide a useful reference for the development of U.S. initiatives on transmission-distribution coordination and DER integration into markets and system operations. Key takeaways are discussed that can inform the development of a U.S. national initiative, including to:
- Start with a clear statement of purpose and objectives
- Establish central delivery capability
- Define and pursue quick wins
- Prioritize targeted stakeholder engagement
- Work toward early alignment
- Develop fit-for-purpose tools
- Ensure process agility
- Engage parties who have the authority to effect change