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Distribution System Operators and Energy Communities

Distribution System Operators and Energy Communities

The energy transition brings economic and socio-cultural challenges, as we move from high-carbon generation assets to low-carbon distributed assets. An increase of distributed energy resources (DERs) - such as in the Nordics where installed capacity increased by ~46% between 2005 and 2017 - is changing the nature of interactions between buildings, districts, cities, and the overarching energy system. 

The impact and control level of distributed assets on the grid varies depending on their nature and connection type, from medium voltage assets such as CHPs and small wind turbines to low voltage assets such as heat pumps, solar PV and EVs. While the higher penetration of DERs may have a positive impact on the grid with increased reliability, energy loss reduction and reduction of voltage fluctuations, it can also create congestion problems - a challenge for distribution system operators (DSOs). 

Proactive solutions have so far included different levels of demand side flexibility: voltage and frequency management at transmission level; congestion management at distribution level, and grid management and support to the distribution network at the local level. Tactics such as turning down demand loads, using batteries to provide short-term power boosts, and dispatching local generators etc. have been actioned. 

It has become clear that the competitive dynamics of flexibility markets are being redrawn, thanks in part to the European Union’s ‘Clean Energy for All Europeans’ package. New rules have been set for DSOs, encouraging them to procure flexibility as a cost-effective solution to solving grid issues. Member States that translate regulatory framework into action fast enough will provide commercial advantage and opportunities to DSOs, allowing them a share of this new value stream. Smaller and less innovative DSOs will be forced to keep up. 

Our current multi-client study, Flexibility services for DSOs, reveals those DSOs prepared to innovate and deliver demand side flexibility solutions, have unique commercial opportunities to develop new flexibility markets, ensure better margins and secure concession renewals. The report features in-depth research with electricity network companies, providers of demand-side flexibility, and companies providing marketplaces for flexibility, alongside interviews with regulators and analysis of issues, themes and lessons learned by demand side flexibility incumbents so far. 

For further information on the opportunities demand side flexibility presents for distribution system operators, contact us today

 

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Tuesday, 14 July 2020

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