Facilitating DER market participation from the EDGE of the grid


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Australia has the highest uptake of residential solar photovoltaic (PV) in the world. Battery storage systems are also becoming more attractive to Australian consumers. These and other Distributed Energy Resources are presenting new opportunities for owners to provide energy and other services to wholesale markets.

For example, aggregators bundle distributed energy resources (DER) to work as a single entity like a virtual power plant (VPP), allowing households to more efficiently offload stored PV generation to the system. However, as the volume of DER participating in such markets increases, it is becoming more necessary to ensure the integrity of the distribution network, guaranteeing that voltages and power flows remain within limits.

One challenge for distribution companies is that they are not permitted to directly manage DER or aggregators. Project EDGE will therefore demonstrate the use of so-called operating envelopes that are intended to better facilitate DER market participation from the ‘edge’ of the grid.

Rather than distribution companies giving households a fixed limit, such as the 5kW export limit per phase commonly used in Australia, distribution companies could potentially use operating envelopes to calculate the most suitable local limits that ensure voltages and power flows are acceptable. These new local limits can be significantly larger than the fixed limits that are commonly used. This information can then be given to aggregators to decide how to best manage their DER portfolio. Furthermore, local market and pricing mechanisms can also be developed whereby network-related constraints and services will be priced in an integrated manner and consistently, that is, co-optimised wholesale energy and ancillary services.

A key advantage of using operating envelopes is that it allows distribution companies to ensure network integrity without having direct control of the DER or the aggregator. This makes better use of existing infrastructure and increases the efficiency of the overall electricity value chain. Ultimately therefore, it should help to reduce electricity costs for consumers, particularly as we integrate more DER.

Project EDGE is a world-first project that brings together the spectrum of relevant stakeholders across the electricity value chain: customers, DER owners, aggregators, distributors, the system/market operator and researchers. Several innovations will be demonstrated through trials that will test these operating envelopes and the trading of local services. This is crucial to understand the complexity, interactions and challenges that distribution companies will face globally as they accommodate the widespread adoption of DER. Project EDGE will also inform ongoing efforts on future electricity market design, particularly so-called two-sided markets.

Project EDGE was recently awarded funding by the Australian Renewable Energy Agency (ARENA), and is a partnership between AusNet Services, Mondo, the Australian Energy Market Operator (AEMO) and the University of Melbourne. Development of the algorithms for the operating envelopes and the service co-optimisation is being led by Professor Nando Ochoa and Professor Pierluigi Mancarella of the University’s Department of Electrical and Electronic Engineering.

“AusNet is very pleased to be working with the University of Melbourne on Project Edge. AusNet and the University have worked on several important projects over the last few years as our partnership has grown. The University’s deep understanding of distribution networks, distributed energy resources and the orchestration of new forms of energy market will play a key role in delivering this project,” says John Theunissen, Director Smart Networks at AusNet Services.

For more information visit the project website.

First published by the Faculty of Engineering and IT at the University of Melbourne

First published on 28 October 2021.

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