System operators around the world face the increasing integration of distributed energy resources (DERs) into the power grid. DERs – small-scale, decentralized generators such as rooftop solar panels, wind turbines, batteries, and electric vehicles – are connected to the distribution system, whereas larger inverter-based resources are often connected to the transmission system and can be part of the bulk electric system. These resources offer many benefits, such as reducing greenhouse gas emissions, enhancing energy security, and empowering consumers. But they also pose many challenges, such as creating congestion, voltage fluctuations, and frequency deviations in the grid.
Here we explore how system operators can cope with the variability and uncertainty of DERs, and how they can leverage their capabilities to optimize the grid performance. We focus on three main points:
- The options to handle the variability of DERs
- The importance of system ramping capability
- The role of forecasting and market design
The Options to Handle the Variability of DERs
One of the main challenges of DERs is the variability in the power supply they create. Their power output can vary significantly over time, depending on the weather conditions; for example, solar power can drop sharply when there is cloud cover, and wind power fluctuates with the wind speed and direction. This mismatch between supply and demand can affect the grid stability and reliability.
To handle this variability, system operators have two main options: energy storage systems and fast-ramping units. Energy storage systems, such as batteries and pumped hydro, can store excess energy when there is more supply than demand, and release it when there is more demand than supply. They can provide quick and flexible energy to fill the gaps between supply and demand and help smooth out the power fluctuations from DERs. Fast-ramping units, such as gas turbines, can adjust their output rapidly to match the load changes. They can provide fast and reliable power to pick up or drop the load and help maintain the grid frequency and voltage.
Both options have their pros and cons. Energy storage systems are more environmentally friendly, but they are also more expensive and limited by their capacity and duration. Fast-ramping units are more economical and scalable, but they are also more polluting and dependent on fuel availability and price. The optimal mix of these options depends on the availability and schedule of the resources, as well as the cost and benefit of using them.
The Importance of System Ramping Capability
Another challenge of DERs is that they increase the need for system ramping capability, the ability of the system to change its net load (the difference between the total load and the total generation from DERs) over a given period. For example, if the net load increases by 100 MW in 10 minutes, the system needs to have a ramping capability of 10 MW/minute to meet the load change.
The ramping capability is important because it determines how well the system can cope with the variability and uncertainty of DERs. If the system has enough ramping capability, it can adjust its generation to match the net load and maintain the grid stability and reliability. If the system does not have enough ramping capability, it can face difficulties in meeting the net load, and risk grid disturbances and blackouts.
The ramping capability depends on three key dimensions: MW, MW/minute, and future MW. MW is the amount of power that the system can change, MW/minute is the rate of change that the system can achieve, and future MW is the projection of the power that the system will need in the near future. These three dimensions together define the flexibility of the system, which is the ability to respond to the changing net load.
The Role of Forecasting and Market Design
A third challenge of DERs is that they require more accurate and timely forecasting and market design. Forecasting is the process of predicting the future power output from DERs, as well as the future load demand. Market design includes the process of creating the rules and incentives for the participation of DERs and other resources in the grid operation and planning.
Forecasting and market design are crucial because they enable the system operators to manage the complexities of DERs and to leverage their capabilities to optimize the grid performance. By using richer forecasting models that capture the key characteristics of DERs, such as their location, type, size, and behavior, system operators can better anticipate the future net load, and plan the optimal dispatch and scheduling of resources. By using innovative market design that reflects the value and cost of DERs – such as their energy, capacity, ancillary services, and environmental attributes – system operators can better incentivize the participation of DERs and other resources and enhance the efficiency and reliability of the grid.
There are many examples of system operators that are successfully managing the integration of DERs, using the options, capabilities, and tools discussed in this blog. One of them is the Western Energy Imbalance Market (EIM) in California, which is a real-time market that balances the supply and demand of electricity across multiple states in the western US. The EIM uses advanced forecasting and market design to integrate diverse generation and load resources, while exploiting the geographic diversity and complementarity of DERs. Another example is the Philippines, an archipelago of more than 7,000 islands with a high penetration of DERs, especially solar and wind power. The Philippines uses an energy market management system, which considers weather forecasts and provides the system with the needed future MW projections with price signals to incentivize the participation of generators and their individual capabilities.
These examples show that DERs are not a threat, but an opportunity for the power grid. They offer many benefits, such as reducing greenhouse gas emissions, enhancing energy security, and empowering consumer, but they also pose many challenges, such as creating congestion, voltage fluctuations, and frequency deviations in the grid. To cope with these challenges, system operators need to use the options, capabilities, and tools discussed here, and adapt to the changing dynamics of the grid. By doing so, they can keep the lights on when the sun doesn’t shine and the wind doesn’t blow.
Head of Energy Market Management, Siemens Grid Software