We can blame disruption in the energy industry for many confusing things, including the terminology. Not so long ago, we had to get our head around Synthetic Inertia and firming.
Then along came the Distribution System Operator, and now, let’s welcome DER Orchestration.
In the recent consultation paper Open Energy Networks, AEMO and the Energy Networks Association are opening the door on a very important next step in the energy transition.
Distribution network companies in Australia have for some time flagged the term ‘Distribution System Operator’ – first gaining airplay by Western Power Distribution in the UK – where their role moves from a relatively passive function as managers of poles-and-wires assets to a greater level of active control of customer ‘behind the meter’ facilities such as PV generation, energy storage and time-discretionary appliances.
The AEMO/ENA paper is an early yet important next step in generating the conversation around the need for new energy markets and DER dispatch.
Mind you, such a concept of DER control is not new.
Many states have for many years employed control strategies and customer incentives centred on time-of-use pricing, time clocks or direct load control to encourage the efficient use of generation and network facilities.
The control of water heating, air conditioning, pool filtering and dishwashers have all been effective in reducing energy use at times of peak energy price or high network demand – Energex’s peak-smart initiative being a case in point.
The AEMO/ENA paper hinges on the forecast of rapid continued growth in embedded PV generation and the uptake of appliances, including batteries, that will play a large part in the shape of the customer energy demand curve.
Underlying this thinking is that as a proportion of energy generation – both by centralised utilities and embedded renewable resources – becomes more variable, the supply-demand balance pitch moves to include adjusting the load to match the available generation.
A number of risks to the vision of an efficient energy future are emerging, including a fundamental risk to the stability of the transmission network and market should the level of embedded generation reach a point where it exceeds the underlying demand, such as on a moderate spring weekday afternoon some years in the not-too-distant future.
The need to send a ‘curtailment’ signal to customer’s PV inverters at such times is considered.
Similarly, a position inherent in the DSO model is the capability of the ‘orchestration’ of the increasing number and forms of generation and control that is forecast to exist deep in the distribution network – mainly in customers’ installations ‘behind the meter’.
Through some form of coordination and largely as an extension of the current demand management philosophy, the fall in network utilisation (aka ‘the duck curve’) and decline in the quality of network voltage control could be addressed.
To achieve this, distributors will need a higher level of understanding of their extensive and diverse low voltage networks, as well as the introduction of a greater level of direct control capability or other mechanism, such as pricing, to influence customer energy use behaviour.
The general philosophy of the DSO and DER Orchestration is an important idea, but as always there are steps to be carefully taken.
Some early work though the role of demand aggregators and developers of Virtual Power Stations is under way.
If we learnt anything from the rollout of the smart meters in Victoria however, bringing the community and wider industry along in understanding and validating the modelling, the nature of the opportunity and the costs will be critical in the success of any initiative.
More importantly, against the background of some of the highest retail energy prices in the world, many of the assumptions of the costs, benefits and alternative models need to be tested and considered in the community.
No doubt, more to follow.
Mike Swanston is the principal of The Customer Advocate, a small consultancy working to support the best interests of energy consumers.