Managing electric flexibility from Distributed Energy Resources: A review of incentives for market design

Eid, Cherrelle; Codani, Paul; Pérez, Yannick; Reneses, Javier; Hakvoort, Rudi A.

doi:10.1016/j.rser.2016.06.008

Cited by 344 publications

(181 citation statements)

References 56 publications

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“…Also, a further development of balancing markets can increase participation and income opportunities for flexible capacities, e.g. if the frequency of auctions is increased, bid size requirements are reduced, asymmetric bids for positive and negative reserve are permitted, or contract duration lengths are shortened [73,74,88]. Moreover, implementing a more stringent supervision of balancing group management and setting stronger incentives that quarter-hourly balancing actually takes place could increase remuneration for flexible capacities [89,90].…”

Section: Electricity and Balancing Market Reformmentioning

confidence: 99%

Contributions of flexible power generation from biomass to a secure and cost-effective electricity supply—a review of potentials, incentives and obstacles in Germany

et al. 2018

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Background: With wind power and photovoltaics, volatile renewables have emerged as central pillars of the energy transition. This increases the demand for flexibility options to compensate fluctuations in power generation. Focussing on the role of bioenergy as a renewable flexibility option, this article seeks to address two questions. The first is whether there is an option value of bioenergy as a provider of low-carbon flexibility in a future power system, which might justify continued technology-specific deployment support. The second question is whether existing market and policy incentives are effective in activating flexibility potentials, and what perspectives exist for increasing flexibility incentives. Methods: The article follows an interdisciplinary approach. First, technical potentials for flexible bioenergy plants and potential systemic contributions are examined. This is followed by an economic assessment of what flexibility incentives are provided by relevant market and policy framework conditions. Findings: Power from biomass can be well suited to provide flexible generation for grid stabilisation and residual load balancing. Biogas plants require an increase of nominal power over rated power, whereas the technical flexibilisation potential of solid biomass plants depends on specific technologies. Particularly, small-scale combined heat and power systems can deliver fast responses. For existing biogas plants, the Renewable Energy Sources Act's (EEG) flexibility premium and balancing market revenues have incentivised some changes in the production behaviour and investments in plant flexibilisation. However, decreasing spot market price levels and decreasing price variance reduce incentive strength. This also limits flexibilisation incentives for solid biomass plants. For new biogas plants, the EEG's remuneration rules set effective flexibility incentives, but 2014 reductions in remuneration rates have significantly slowed down the expansion. Conclusions: Given high technical potentials for flexibility provision, there is an option value of keeping bioelectricity in the technology mix until more is known about its future competitiveness with other low-carbon flexibility options. To maintain this option value, there is a case for setting policy incentives in a way that continued technological development remains possible. A stringent climate policy could accelerate structural change in the electricity sector, to allow for market price signals which incentivise low-carbon flexibility provision.

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Section: Electricity and Balancing Market Reformmentioning

confidence: 99%

Contributions of flexible power generation from biomass to a secure and cost-effective electricity supply—a review of potentials, incentives and obstacles in Germany

et al. 2018

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“…One of the advantages of the microgrid operation is the increase in capacity of the lines due to demand changes [2], [3], [23], [24]. In addition, modifications in the consumption behavior of the demand may lead to an increase in the operational safety margin, thus reducing the likelihood of unplanned electricity blackouts and overcharges for restoration [24], [31]- [33].…”

Section: Integration Of Distributed Energy Resourcesmentioning

confidence: 99%

“…These benefits are obtained because the operator has information and constant monitoring of the real-time values of the microgrid's variables; therefore, decisions can be made based on the permanent exchange of information and the dynamic operation can be based on the behavior of different agents in the system. These advantages are reinforced over time and lead to an efficient, reliable, and safe operation with flexibility levels [2], [24], [31], [34].…”

Section: Integration Of Distributed Energy Resourcesmentioning

confidence: 99%

“…Electrical distribution networks that integrate generation near consumption centers, Energy Storage Systems (ESSs), and the active participation of the demand present challenges related to the operation, integration, and control of these resources, which are called DERs [1], [2]. This integration creates opportunities to define technical, regulatory, and economic strategies in order to guarantee a safe and reliable operation of isolated or interconnected microgrids [2]- [4], which enables the flexibility of the distribution network and allows the distribution system to provide ancillary services to the transmission system.…”

Section: Introductionmentioning

confidence: 99%

“…This integration creates opportunities to define technical, regulatory, and economic strategies in order to guarantee a safe and reliable operation of isolated or interconnected microgrids [2]- [4], which enables the flexibility of the distribution network and allows the distribution system to provide ancillary services to the transmission system. In addition, the benefits that each agent offers can be leveraged to ensure that the operation by microgrids is sustainable over time.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Integration of distributed energy resources in isolated microgrids: the Colombian paradigm

García

Arango-Manrique

Carvajal-Quintero

2018

TecnoL.

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The electrification of rural or isolated areas coupled with increasing environmental concerns have promoted the emergence of Distributed Energy Resources (DER) and the operation by isolated microgrids. However, the integration of such resources involves technical issues related to the reliability and continuity of the electricity supply. Indeed, the uncertainty of renewable generation sources and the reduced inertia of isolated microgrids are challenges for the operation of these distribution systems. One way to address them is by providing ancillary services through all the resources involved in the system’s operation (generation assets, demand share, and storage systems). Accordingly, this paper first presents a literature review of the challenges and potential benefits of integrating DERs into the operation of a distribution system. It also includes some common strategies to mitigate the vulnerability of the introduction of these technologies in microgrids. Afterwards, the current state of each type of resource in Colombia is assessed. Finally, some basic strategies that enhance the benefits of DER integration are outlined along with the overcoming of challenges of microgrid operation in said country. To that end, we consider isolated Colombian regions to be natural laboratories where the effects of DER integration and the requirements for the operation by local production units can be analyzed.

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Techno‐economic analysis of solar grid‐based virtual power plant in Indian power sector: A case study

Sharma

Mishra

2019

Int Trans Electr Energ Syst

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Summary The environmental threat and rising fuel prices are the two major challenges faced by the utility to provide clean and affordable electricity to the consumers. The change in government policies provides assistance for large‐scale deployment of Distributed Energy Resource (DER) like rooftop solar PV, but at the same time, the intermittent nature of this renewable‐based DER produce adverse effects on utility stability and its economic viability. The concept of virtual power plant (VPP) can be a possible solution for these issues through coordination and scheduling of DER, storage, and flexible load, which results in secure operation with high penetration of DER and utility peak‐load reduction. In this paper, the Distributed Energy Resources Customer Adoption Model (DER‐CAM) is utilized, which is a Mixed Integer Linear Programming‐based decision‐making tool. For determining the potential of VPP and its implications, a case study of Punjab State Power Corporation Limited (PSPCL), a state power utility, is studied. The main objectives of the paper are cost minimization, peak‐load reduction, and reliability enhancement. The DER‐CAM model simulates different load profiles, and the optimal investment solution is determined, which ensures monetary benefits for both consumer and utility.

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Managing electric flexibility from Distributed Energy Resources: A review of incentives for market design

Cited by 344 publications

References 56 publications

Contributions of flexible power generation from biomass to a secure and cost-effective electricity supply—a review of potentials, incentives and obstacles in Germany

Contributions of flexible power generation from biomass to a secure and cost-effective electricity supply—a review of potentials, incentives and obstacles in Germany

Integration of distributed energy resources in isolated microgrids: the Colombian paradigm

Techno‐economic analysis of solar grid‐based virtual power plant in Indian power sector: A case study

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