DESCRIPTION

Traditionally, electric power systems have been centralised structures organised into generation, transmission and distribution, placing customers at the end of the supply chain. This is a unidirectional structure where electricity generated by large power plants is transported via transmission and distribution networks to be delivered to customers. However, recent decades have witnessed the emergence of distributed energy resources (DERs) such as rooftop solar PV installations, micro wind turbines, battery energy storage systems, plug-in electric vehicles and smart home appliances that are becoming active participants in the electricity system.

With the emergence of distributed energy resources – such as distributed generation,
demand-side response and storage – the role of DSOs will expand. As such, DSOs could have access to the distributed flexibilities connected to their grid for the benefit of both the distribution grid and consumers. In their new role, DSOs could operate the distributed energy resources, if the regulatory framework allows it. If not, DSOs could at least act as neutral market facilitators and provide high-resolution price signals to the market players that own such flexibility assets. Having access to distributed flexibilities would have a two-fold objective of optimising the use of the distribution networks and minimising the need for future grid investments.

CONTRIBUTION TO POWER SECTOR TRANSFORMATION

The new role of DSOs will have a significant impact on the way the power system is operated today.depicts some key benefits that can be reaped from this change in role.

Increasing flexibility in distribution networks Taking advantage of the increased penetration of
DERs, DSOs could procure flexibility services – such as voltage support, congestion management, peak shaving, etc. – from the assets that are already connected to their distribution network.Using such services would further contribute to the integration of renewables in the distribution grid and especially the integration of variable renewable energy sources. This brief forms part of the IRENA project “Innovation landscape for a renewable-powered future”, which maps the relevant innovations, identifies the synergies and formulates solutions for integrating high shares of variable renewable energy (VRE) into power systems.

While in some power systems, generation, transmission and distribution of power are performed by a single vertically integrated (and sometimes state-owned) organisation, in other power systems these functions are performed by separate organisations. This innovation landscape brief applies mainly to power systems in which the transmission and distribution of
power are the responsibility of two distinct entities.

Distributed energy resources (DERs) are small or medium-sized resources, directly connected to the distribution network (EC, 2015). They include distributed generation, energy storage (small-scale batteries) and controllable loads, such as electric vehicles (EVs), heat pumps or demand response.

Efficient co-operation between DSOs and TSOs is critical for the participation of DERs in the
wholesale power markets. The DSOs should also act as, or enable, a data exchange platform
between TSOs and DER owners, providing visibility to the TSO on the type and availability of DERs.summarises some of the key areas of co-ordination between TSOs and DSOs.

Possible co-ordination schemes between DSO and TSO for the procurement of ancillary services from DERs For the efficient operation of a grid with a significant share of electricity from DERs, information sharing between TSOs and DSOs is essential to maximise the benefits that DERs can provide to the system and facilitate their integration into the system. Information sharing between TSOs and DSOs allows them to identify where connected entities
can and should take action to support the needs of the power system. Any co-operation scheme should be well designed and implemented so that the actions taken by the DSO and TSO do not have counteracting effects (Migliavacca, 2018a).

CONTRIBUTION TO POWER SECTOR TRANSFORMATION

Greater interaction between DSOs and TSOs enables better utilisation of DERs in the system and increases system flexibility, while reducing expenditures on network reinforcement. The
critical factor is data sharing on the capabilities of DERs connected to the distribution grid between system operators who manage real-time markets.This results in the efficient management of the wholesale and ancillary services markets.

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