Distributed generation adds complexity to low-voltage grid

As the energy industry continues to change, network operators can leverage smart grid technologies to help manage additional grid complexities.

The new power landscape is a mix of grid-scale and distributed power resources, with an increasing share of small, distributed units. This creates a constellation which distribution networks were never designed for. As a result, managing distributed generation (DG) could, in some ways, become even more complex than managing the current transmission grid.

It’s well understood that distributed generation can provide many benefits, such as adding supply where it is needed, reducing infrastructure costs and improving power reliability. However, with the addition of more renewable generation to the grid, there are also unintended consequences and inherent operating challenges.

One operating challenge is the need to monitor the secondary distribution grids: in principle this process is no different to that used for higher voltage grids, yet in secondary distribution there is a larger number of components, substations and nodes. How to manage these big numbers of components from the grid side in an efficient way is clearly a challenge that needs to be solved. We are currently in a phase where technologies are being introduced to solve the immediate issues, in most cases by using proven solutions from higher voltage levels. The next challenge is to introduce technologies in a way that helps create a feasible and efficient business case.

This was what is happening within the infrastructure side of the business. But there is, of course, also the energy side. In many parts of the world, and certainly in Europe, there is a competitive market where all these new distributed resources need to be integrated into new services and new service providers. In that respect, the transformation of DG is only just beginning. Most of the DG deployed so far has been installed by private investors and has very often been subsidized. This means the business case is not truly sustainable. In the future we will need to find viable models that are not dependent on subsidies.

The rate of progress depends on the legal and regulatory framework of the countries but we are seeing some encouraging examples of how the business models are evolving. In some countries aggregators are becoming active, often focusing on reducing peak load in the grid. But a step that aggregators could consider, even before that, would be to achieve a better match of load and generation. We are also seeing virtual power plants build portfolios of complementary distribution resources. By dispatching the portfolio such virtual power plants can participate in more attractive markets, such as control power markets.

These are initial steps. Some players have already established real businesses, while other players are still in a pilot phase. It is important to stress the need of having sustainable business models that impact the bottom line, support the overall functioning of the power system, which increases the reliability of the power supply.

Smart grid technologies can help utilities engage customers and manage the interconnection of renewable generation to operate the grid, maintain voltages, and provide data on when to dispatch distributed energy resources. Find out more by attending our webinar “Leveraging smart grid technology to manage distributed energy resources” on December 16, 2014 from 2:00pm – 3:00pm EST.

Image credit: Mike Steinhoff under cc license via Flickr [cropped]