Across the globe, the energy industry is witnessing increased penetration of distributed generation resources, such as rooftop solar PV, energy storage, and microgrids – which are small-scale versions of a centralised electricity system.
For most of the past century, electricity systems have experienced gradual change. Electricity has flowed in one direction from centralised utility scale fossil fuelled generation to consumers. Electricity systems were predominantly comprised of long lived and expensive generation and network assets. However, over the past 10 years, those same electricity systems have been forced to confront a transformational period of change. The widespread adoption of distributed energy resources (DER) such as rooftop solar PV and small scale energy storage and energy-efficiency efforts have led to declining asset utilization rates. This has forced the traditional electricity industry to re-evaluate the way it manages and invests in the electricity network.
Given the anticipated growth rate of DER, within the next five years, whole regions of a traditional electricity system will need to be transformed such that they are capable of operating securely, reliably and efficiently with conceivably 100% of instantaneous demand met by DERs. While central generation is expected to continue to provide supply at higher voltage transmission levels, DERs located at the opposite end of the power lines, and even behind electric meters will more than provide for the energy needs of distribution connected residential customers. Given the need to also maintain the whole system with it’s technical operating limitations (e.g. voltage and frequency), this presents monumental technical challenges for systems that were designed and built for an entirely different purpose.
As utilities introduce technology that balances DER management and optimize those resources against their traditional supply (generators or transmission), the best place to focus the optimization scheme is at the distribution substation. If energy balancing is occurring from the substation down to the customers, the distribution system appears more closely resembling a microgrid than it does a central grid. Assuming substations are interconnected via transmission lines, each distribution microgrid becomes part of a federated scheme which can share resources across the many. Some of these microgrids could be operated by other utilities, third-party aggregators or other customer-owned DERs. Therefore, DER management schemes organize its optimization at various spheres of control: circuit level, neighborhood level, microgrid level, substation level and then the whole system.
We believe microgrids become a better solution for the utility than bulk power when contending with DER.
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