DER aggregation: Bi-directional data flow disrupting bulk power system model

Distributed Energy Resource (DER) advancement is the driver to create significant growth in two-way data flow between DER devices and grid control systems, as well as between DER owners/aggregators and other market actors. Driven by requirements to support greater amounts of renewables, our distribution grids are transforming to accommodate two-way electricity and two-way data flow on the journey to become greener, intelligent, and more flexible.

Quantity and types of DER deployments continue to grow across the country. The complexity of managing the growth in PV, storage, and EV interconnection and their impact on the grid will continue to increase as well. Furthermore, the desire for third-party driven investment of DER at the state-level has outpaced the market’s ability to support the investment with the necessary structure and flexibility to support resources that can act as load, generation, and regulation in the distribution grid. The Federal Energy Regulatory Commission (FERC) recently convened (April 10-11) for a two-day technical conference to discuss just that—the potential effects of DER being integrated into the bulk power system, and how aggregated DER resources will participate in wholesale electricity markets.

While a formal rule will be handed down by FERC later this year (2018), the discussion now taking place among RTOs/ISOs, vertically integrated utilities, and regulatory bodies emphasizes the varying market barriers for DER aggregation and the downstream impacts and opportunities that may arise. Over the course of the two-day conference, panel discussions focused their dialogue on several key areas:

1. One critical topic was the potential for DER aggregation across several price-points, or “nodes,” as there are inherent challenges in putting energy supply on the distribution system as well as taking load off the system. Doing so would more easily allow for more resources to participate aggregated as a single source to the grid, but may cause billing and stability concerns across RTOs/ISOs. Examples: California (CAISO) is focusing on zonal aggregation by right-sizing and setting constraints per areas with similar electricity prices. Conversely, New York is focusing on a singular node pathway forward due to the region’s significant congestion problems to address reliability concerns and provide sufficient aggregation and market participation for small-scale resources.

2. Another key area of discussion was whether a singular, one-size-fits-all approach across all markets is feasible. Streamlined and standardized aggregation rules are preferred by third-party providers, while RTOs/ISOs prefer regional specific approaches that would allow for adaptation and iteration.

There is a distinct dichotomy of how DER aggregation tows the governing boundary between the distribution system and wholesale market. DER aggregation allows for energy services to move upward from the distribution system to the wholesale market—the exact opposite flow of the traditional bulk power system. This flow reversal illustrates an opportunity for technological tool-sets to provide transparency and coordination between the DER aggregator, utility, and the market operator via data analytics and advanced integration platforms.

This new two-way flow on the distribution system provides stakeholders an opportunity to improve current-state processes. New technology platforms and third-party solutions need to address the coordination gap between utility requirements to dependably provide power to end-users, markets to provide initiatives for efficient and competitive participation, and regulators to structure rules and protocol to provide safe, reliable, and affordable energy.

Furthermore, DER owners want to maximize the value of each DER that comes on to the grid. With each new resource added to the grid, utilities or electric distribution companies (EDC), are tasked with playing the role of facilitator and/or gatekeeper by maintaining safe interconnection standards, supporting the needs of the grid, and indirectly supporting the financial requirements of third-party DER investment.

DER aggregation and bi-directional electricity flow on the distribution system is creating both data challenges and grid visibility opportunities. Deciphering, measuring, and digitally digesting this data from the DER’s and the grid is a critical exercise to calculate the value-add and benefit of DER aggregation for all stakeholders. Variable load supply and unpredictable demand are a few variables that disrupt the distribution grid. Data collected at the interconnection process is an example of how digital solutions can improve grid modernization by understanding DER capabilities better and being able to better manage demand, supply, and power flow via predictive and real-time data aggregation of the DER assets on a distribution feeder.

Smart-grid transformations are shifting focus to the operational technology systems that will leverage the two-way data flow to the DERs for the future (ADMS, DERMS, etc.) to cost-effectively manage the generation, load, and regulation challenges on the distribution grid of the future.