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Smart software platforms for smart grids

The expansion of distributed energy resources has precipitated the rise of advanced software platforms to manage them. Virtual power plants and distributed energy resource management systems can help integrate renewables and low-carbon assets more smoothly while allowing value from the flexibility that resources like rooftop solar, battery storage, electric vehicles and heat pumps can also provide to be extracted

Decentralised energy systems require next-generation control mechanisms to maintain grid stability


MAXIMISING RENEWABLES
As renewable generation capacity exits public supports schemes, operators are looking for ways to maximise their revenue AVOID GRID UPGRADES
Digital platforms can help increase the level of clean electricity without the need for the expensive and burdensome improvement of transmission infrastructure KEY QUOTE
With the evolution of DER like solar, batteries and EVs, you have these big loads but they can be managed and controlled and used to provide resilience


With over 50% of households hosting rooftop solar systems, the suburbs of Harrisdale, Piara Waters and Forrestdale in Western Australia provide an ideal setting for trials now underway on how distributed energy resources (DER) can be smoothly integrated into the power system and provide benefits for the grid. Under a collaboration between the system operator Western Power, power generator and retailer Synergy, Australian Energy Market Operator (AEMO) and Energy Policy WA—known as Project Symphony—rooftop solar, batteries, air conditioners, pool pumps and hot water systems will be connected to each other and monitored, controlled and orchestrated” in real-time in a virtual power plant (VPP). The power generation, load and storage capacity of the VPP will be used to help balance the supply and demand of energy on the grid and provide services like frequency regulation. The trials are set to last until mid-2023. Using virtual power plants means there is less of a need for traditional generation assets, such as coal or gas, which is a step towards a more sustainable power system,” explained Western Australia energy minister Bill Johnson as the project was launched in February 2021. It will lay the groundwork for a future where household energy devices help keep the power system stable, enabling more and more renewable energy on the grid,” he added. Project Symphony builds on the experience already gained elsewhere in Australia, which is a frontrunner in rooftop solar and the use of VPPs. At the time of its 2016 debut, Australian energy generator and retailer AGLs programme ranked as the world’s largest residential VPP, featuring around 1000 solar batteries in homes and businesses in South Australia connected through a cloud-based platform allowing it to operate as the equivalent of a 5 megawatt (MW) solar peaking plant. AGL customers receive payments for allowing access to their batteries when needed to boost grid reliability. AGL extended its VPP programme to other Australian states and new VPP providers have since piled into the market. US-based electric vehicle manufacturer Tesla subsequently claimed the world’s largest VPP with the announcement of plans to install 50,000 solar battery systems in South Australia in 2018. CHALLENGES AND OPPORTUNITIES Moving from a power grid in which electricity is transmitted from a small number of centralised generation sources to one featuring bi-directional power flows, variable renewable energy sources and thousands or even millions of assets deployed at the distribution level—many of them behind-the-meter—represents a challenge for system operators around the world. The electrification of transport and heating is expected to put additional demands on distribution networks, while also providing added flexibility to the grid. Twenty years ago, grid operators just ignored rooftop solar altogether, but you can’t do that anymore,” says Peter Asmus of Guidehouse Insights, a market intelligence and advisory firm. With the evolution of DER like solar, batteries and EVs, you have these big loads but they can be managed and controlled and used to provide resilience.” Guidehouse Insights predicts that new global capacity from DER topped that for centralised generation for the first time in 2021. It predicts annual capacity additions for DER will be about double that of centralised generation by the end of this decade. In terms of flexible DER, A big resource in our arsenal is storage, which is a traditional load management tool,” says Bud Vos of Generac Grid Services, a grid software and solutions provider. When it comes to industrial customers, We also do a lot of work with large induction motors like those at wastewater treatment plants,” for which you can adjust power requirements by speeding up or slowing down, he adds. SOFTWARE NEEDS Software platforms for integrating DER must also be flexible and scalable, as the assets and resources featured in portfolios evolve. Everyone is talking about electrical vehicles and that’s probably the next big wave, although some of the technology is not yet there,” notes Vos. With EVs, we will see demand for electricity go up and as it starts to impact people’s electricity bills, we will want new ways to manage this,” he adds. Asset owners are already seeing the potential. In July 2021, student transport company Zūm announced a partnership with US energy flexibility management software provider AutoGrid to use its VPP technology platform to deploy 10,000 electric buses in the next four years to create an estimated flexible capacity exceeding one gigawatt that the grid operator can use when buses and their batteries are parked. AGGREGATING RESOURCES While aggregating resources makes it easier to monitor, control and optimise their operations, VPPs also require the right regulatory backdrop and a business case. If the market framework allows for it, VPPs can earn revenues by participating in wholesale power markets and providing grid services. VPPs are more valuable where markets are liberalised and competitive, as is the case in Europe, says Devrim Celal of KrakenFlex, the software platform of UK utility Octopus Energy that manages the real-time energy supply and demand of clean energy technologies. VPPs need a market to sell to and that is not always the case, Asmus of Guidehouse adds. In November 2021, KrakenFlex partnered with Belgian-German system operator Elia Group and Elia’s European energy data marketplace spinoff re.alto to assist efforts to design a consumer-centric market. In trials set to run through 2022, consumers will receive price signals to prompt changes in their use of home energy devices including batteries, EVs and heat pumps. This is expected to lead to cost savings for consumers and help the system operator to balance the grid. Initially, those enrolled in the trials will be Octopus clients in the UK, although the utility’s clients in Germany and elsewhere in Europe could also subsequently come on board. Driving the push towards advanced software platforms to manage DER is the fact that, Renewables are coming off subsidies so you need to optimise them better,” says Celal. Suddenly the need for flexibility is being recognised and retailers are also realising they will lose customers if they don’t provide flexibility,” he adds. In the United States, Hawaii, California and northeast states are hotbeds for VPP activity. In Massachusetts, Connecticut and Rhode Island, for instance, customers of the utilities National Grid, Eversource and Cape Light can participate in the ConnectedSolutions programme, receiving payments when battery storage, solar systems, EVs or Wi-Fi thermostats are used to help reduce peak demand. The broader US market looks set to be boosted by the US Federal Energy Regulatory Commission (FERC) Order No. 2222 published in September 2020. If enacted, it will enable DER including electricity storage, intermittent generation, distributed generation, demand response, energy efficiency, thermal storage and electric vehicles and their charging equipment to participate in wholesale, capacity, energy and ancillary services market alongside traditional resources. SMART AND STANDARDISED Commercial aggregators started out more than a decade ago communicating with demand response participants by phone, before moving on to e-mails and text messages, says Graham Ault of Smarter Grid Solutions, a Glasgow-based DERMS specialist firm. Today, sophisticated software solutions for integrating DER are typically based on the cloud and make use of artificial intelligence for forecasting generation and demand and assessing the performance of assets. One key trend is to make these platforms interoperable. As much as we need a vibrant marketplace for all sorts of flexibility and new energy solutions, we also need these solutions to interact with each other,” notes Ault. THE ADVENT OF DERMS While VPPs and the software platforms needed to run them have been around for a while, their commercial use has been accelerating in recent years as the penetration of renewable energy increases. A newer industry buzzword is DERMS, or distributed energy resource management systems. A VPP is used to harness the power of DER and their flexibility and make it look like a power plant at the system level,” explains Vos of Generac. DERMS is more about dealing with problems at the distribution level, things like overvoltage or overpower or shifting energy around between customers.” VPPs represent a bottom-up approach for the economic optimisation of DER while DERMS, Looks at things more from the eyes of the grid operator,” adds Asmus. You can think of it as a journey. Most people began with demand response—modulating loads—and then storage was incorporated. So there was an attempt to control this and that is where you come to VPPs, but then you have reliability and control issues and go to DERMS. In that case, VPPs can be considered a subset of DERMS.” DEFER GRID UPGRADES Whether they be VPPs or DERMS or a combination of both, software platforms can help defer investments in grid infrastructure, speed up the deployment of renewable energy assets and facilitate the development of new markets to help support the reliability of the grid. The Flexible Interconnect Capacity Solutions (FICS) project, led by Avangrid, the US subsidiary of Spanish utility giant Iberdrola, used the DERMS platform of Smarter Grid Solutions to connect 15 MW of new solar capacity in Spencerport, New York that otherwise would have come online only with significant delays or hefty grid investments. The developers of PV wanted to connect to the grid but there was not enough transmission capacity due to technical limits,” says Smarter Grid Solutions’ Ault. By using digital technology and being more granular about when PV is being exported to the grid, you can monitor and take action in only the small number of hours [when capacity is constrained].” In the UK, the Power Potential collaboration between National Grid ESO and UK Power Networks, a DERMS software platform helped evaluate the case for DER providing dynamic voltage control services to the national electricity system through the establishment of a new market for reactive power. Reactive power is the power needed to keep electricity flowing and is key to maintaining a system’s voltage within required limits. The project was born out of challenges National Grid ESO was facing with dynamic voltage control in Southeast England. There were a lot of interconnectors and a lot of solar panels while we were losing a lot of conventional generation,” explains Biljana Stojkovsa of National Grid ESO. With investments in conventional generation and overhead lines not possible, National Grid ESO wanted to see if distributed resources like solar and batteries could provide these voltage regulation services. Plants participating in the project were also able to generate additional revenue. Battery storage performed quite well, wind already provides these services and solar is open for the market, but further work needs to be done on the inverter,” Stojkovsa says. M&A FRENZY One sign of the growing importance of advanced software platforms for the management of DER is the intense merger & acquisition activity seen in the sector over the last few years. GE Digital in December 2021 acquired Canadian energy software provider Opus One Solutions Energy. Earlier that year, Mitsubishi Electric purchased Smarter Grid Solutions and oil major Shell snapped up German VPP operator Next Kraftwerke. These transactions followed a string of deals in 2020 including Generac Power Systems’ acquisition of VPP and DERMS platform provider Enbala Power Solutions; the purchase of grid software firm AMS by Fluence, the grid storage joint venture of Siemens and AES; and Octopus’s purchase of Upside Energy, rebranded as KrakenFlex. The deals are not likely to stop anytime soon. We want to see a massive contribution from decarbonised assets,” notes Vos. To do that, the needs for flexibility of the power system will become greater and greater.” •


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Heather O’Brian