The Key is Flexibility

Smartnet partners at VTT discuss the complexities that DSOs will have to manage in the coming decades and the essential role of system flexibility.

In the next decades, electricity distribution networks and DSOs will have bigger and more active role than today. That is necessary to enable the necessary distribution of ancillary services, system flexibility and power generation to the customers of the power distribution networks. Otherwise the costs of networks, centralised flexibility and ancillary services become too high. That is not possible, because the costs of unsound infrastructure investments etc. cannot be moved to distribution network customers that can choose to shift to the new and emerging energy technologies and completely disconnect from the grid.

Without compromising the role of the DSO as a provider of a neutral and impartial platform for the electricity market, the regulation of the DSOs needs to become much more flexible than today, due to cost efficiency reason. The DSOs must be able to substitute and delay more expensive network investments by using flexible distributed resources (such as flexible loads, storage, generation and micro grids) for the management of voltages and congestions.

Furthermore, the distributed resources have abundant potential for FCR and a/mFRR services and can also respond faster than big power plants. Reorganising the reserve markets will allow the use of this potential. The abundant supply of fast responding resources will also enable some reduction of the complexity of the existing reserve markets. Flexible distributed energy resources (loads, storage, generation and micro grids) will be increasingly used as related regulation and markets develop. The quality of the supply and power quality will be more flexibly tailored to the customer’s needs and willingness to pay.  The network tariffs and ancillary service payments must better reflect the local time variations in the power distribution costs, which imply nodal pricing markets. Most old services will stay or develop and new types of ancillary services will be introduced. Also some services may merge so that the complexity can be kept manageable.

In addition, ICT role will also change and increase in the future, since new communication technologies especially related to wireless communications enable more alternatives to implement cost-effective and flexible services (remote monitoring, control and protection). Service quality can be improved and investments to electricity network cables, transformers etc. can be avoided by improving automation. For example, ICT is expected to bring new possibilities for the automated remote management of distributed energy resources and fault prevention. Availability and cost may become limiting factors for distributed producers in the edge of the network due to the absence of suitable communication infrastructure. In general, better quality and security tend to come with a high price tag.

Cyber security of distributed power consumption and generation is also an increasing challenge. Especially the protection of the customer’s systems and appliances is still in its infancy and must be solved. Otherwise it may become possible to create large aggregated power changes by simultaneously controlling millions of power consuming devices via the internet either by accident or intentionally. Notice that it is even easier to control those appliances that are not providing any flexibility to the power system. Thus banning demand side flexibility would only make the risks bigger and not smaller.