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How Are Distributed Energy Resources (DER) Reshaping the Energy Industry and People’s Experience?

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Electricity grids around the world are rapidly changing, due to the increased deployment of renewable energy resources. There are various contributors to this transition:

  • The declining costs of these resources relative to conventional, fossil-fired resources:
  • Customers’ increased adoption of distributed energy resources (DER) is a second factor. Customers who see the value in DER, which gives them a choice in their energy source and the ability to proactively manage their energy use, are driving this trend.
  • Last but not least, the net zero carbon emissions can be achieved by increasing the renewables’ share into the energy generation mix. DER are the better go-to option because they provide energy security, climate change mitigation and economic benefits.

However, the effective integration of renewable resources into electricity supplies and grids is the industry’s central challenge, both technically and economically.

DER can provide key grid services, such as flexibility, that will complement, rather than obstruct, the deployment of large-scale renewables. A lot of regulators and utilities are demonstrating how to pivot away from legacy systems in order to enable a more efficient, environmentally friendly energy sector. The rest of the utilities and regulators are lagging behind but it is certain, now, that this is the future for everyone.

What Are Distributed Energy Resources (DER)

The term “distributed energy resources” refers to a wide range of technologies and consumer products such as distributed generation (DG), smart inverters, distributed battery energy storage, energy efficiency (EE), demand response (DR), and electric vehicles (EVs).

A distributed energy resource (DER) is a small-scale unit of power generation that operates locally and is connected at the distribution level to a larger power grid. Solar panels, small natural gas-powered generators, electric vehicles, and controllable loads such as HVAC systems and electric water heaters are examples of DERs. A key distinction of a DER is that the energy it generates is frequently consumed close to the source.

The intermittent nature of some renewable resources necessitates the use of multiple renewable resources, as well as a means to connect, manage, and store their output. Batteries and flywheels are required for hardware such as wind turbines and other types of turbines, solar panels, and tidal generation units. To make the most of the energy produced, these power sources and storage devices must be tightly managed using electronic management devices such as inverters and software such as Storage Distributed Resource Schedulers (SDRS).

DERs are commonly used in the residential, commercial, and industrial sectors to manage a variety of smaller power generation and storage methods. They can be used by utility companies, businesses, and individuals to generate and store renewable energy or as backup power sources. The technologies are essential for more advanced power grids, such as smart grids.

What Are the Most Popular DER In Use Today

Distributed Generation (DG):

DG refers to energy-generating small-scale power resources. In contrast to traditional centralized large-scale infrastructure that is connected to the transmission system, DG systems are decentralized and typically connected to the distribution grid. Solar photovoltaics (PV), small wind systems, cogeneration/CHP systems, and fuel cells are all examples of distributed generation (DG). Distributed solar PV installed at the customer’s location has emerged as the most prominent and rapidly growing technology in recent years, buoyed by falling technology costs and favorable policies.

When compared to traditional generators, DG’s greatest capability is the ability to generate energy locally, closer to end users. This can reduce the need for expensive, large-scale utility infrastructure like high-voltage transmission lines. DG also reduces line losses caused by power transmission over long distances.

Finally, the adoption of DG, particularly solar PV, frequently leads to increased utility customer engagement. Utility customers who install DER gain a better understanding of their energy consumption and are more likely to install other DER technologies or participate in utility energy efficiency programs. Customers who use DER can be engaged on an ongoing basis in ways that have the potential to provide additional grid benefits.

Battery Storage:

Energy can be stored and discharged using distributed energy storage systems. As a result, batteries can function as both a generator and a source of load. Batteries can be integrated as standalone systems, used in conjunction with other distributed resources (for example, solar plus storage), and are increasingly being used in electric vehicles.

Batteries can also react instantly to changing load conditions, allowing battery systems to function as a demand response resource to meet load.

Storage systems, unlike traditional utility infrastructure (e.g., transformers, regulators, etc.), can be paired with smart inverters, which are described in more detail below, to control the battery’s energy output autonomously in response to changing grid conditions. Battery storage can be programmed to ramp up or down quickly in response to grid voltage and frequency conditions, which can aid in grid stabilization and management.

Smart Inverters:

Inverters convert direct current generated by a generator to alternating current used by the grid. Inverters used in distributed generation and battery systems were previously designed to turn off when the system encountered a grid disturbance, such as the unexpected loss of a large generating resource. With more DER on the system, this can result in a large loss of generating capacity all at once, disrupting grid conditions even more.

Inverters with advanced functionalities are now deployed, capable of intelligently managing the output of the distributed generation system, reducing the impact of distributed generation on the grid. In fact, by providing voltage support, frequency regulation, and ramp rate control, smart inverters can help to resolve grid constraints. These capabilities benefit the grid by allowing distributed generation to help stabilize grid voltage and frequency, as well as “ride through” minor voltage or frequency disturbances and remain online rather than tripping offline.

Energy Efficiency:

Customer-sited technologies and behaviors that reduce a consumer’s end-use energy consumption are referred to as energy efficiency. Energy efficiency can be targeted at residential, commercial, or industrial customers, and is typically focused on building efficiencies such as lighting or insulation improvements, mechanical improvements to heating, cooling, appliance, and industrial systems, or passive measures that monitor and control energy consumption.

Energy efficiency reduces load and demand by enabling and encouraging consumers to use less energy.

Demand Response (DR):

A coordinated reduction in electric load in response to specific system conditions or market incentives is defined as DR. Demand response can be managed by a customer, a third party, or the utility directly. Demand response capabilities enable utilities to reduce or shift load in response to a lack of power supplies or other grid conditions such as changes in generating capacity, peak load scenarios, ramping requirements, transmission or distribution constraints, or voltage irregularities.

Load can be shaped and shifted using demand response. Through rate structures or energy efficiency measures that encourage better utilization of grid resources, DR programs can reshape customer loads over time.

Electric Vehicles (EV):

EVs are primarily used for transportation, and consumers rarely buy them for the additional grid services they can provide. Intelligent EV charging, on the other hand, enables load shaping and shifting in response to grid conditions. As EV deployment grows, such “smart charging” is expected to provide significant flexibility in the near term. Grid operators can effectively respond to certain grid events by utilizing an aggregated network of EVs and EV chargers, as well as real-time and day-ahead pricing and demand signals. Grid operators, for example, can shape demand by encouraging charging at specific times of day, particularly when abundant solar or wind resources are available. Similarly, during peak demand hours, operators can reduce load by turning off or throttling EV chargers.

Vehicle-to-grid services could provide capabilities similar to energy storage in the medium to long term by not only shifting charging but also allowing EVs to generate power to the grid at critical times to alleviate grid stress. EVs are an especially effective customer engagement tool because they provide an additional demand response resource as well as aggregated energy storage technology.

What Are the Possible Solutions for Successful Integration Of DER

ADD’s partner Itron’s DER Optimizer solution, built on the IntelliSOURCE distributed energy resource management system (DERMS), enables utilities to expand their legacy demand response programs to include a wide range of DERs, such as electric vehicles, smart inverters, battery storage systems, and other flexible loads. In turn, the real-time analytics and optimization engine in DER Optimizer enables utilities to strategically expand their program portfolio from traditional reliability programs to a wide range of DER-based grid services such as economic dispatch, non-wires alternatives, local grid balancing, and microgrid use cases. The mission of Itron is to assist utilities in converting behind-the-meter DERs into valuable grid assets that improve reliability, resiliency, customer engagement, and sustainability.