July 5, 2021

BLOG #1: DERs: a Grid’s Flexibility Solution

On June 29, Powerledger hosted the invite-only, Chatham-House-Rules roundtable.

On 29 June, 2021 Powerledger hosted the invite-only, Chatham-House-Rules roundtable "DERs: a Grid’s Flexibility Solution." Senior representatives of ABB (US) and ABB/Hitachi Power Grids (UK), Enel X, E.ON Innovation, European Power Exchange, ion Ventures, North Carolina State University, and Powerledger were “at the table”. Geographically, perspectives spanned from California and North Carolina (U.S.) through the UK and Germany to Western Australia. 

The overall sentiment was that of a pleasant surprise at the substantial degree of alignment across the group this diverse.

Biggest untapped or under-tapped opportunities?

Automation of flexibilities deployment including across existing infrastructure and activation of local energy markets rose to the top as the biggest untapped (or under-tapped) opportunities for the utilization of DERs as sources of grid flexibility. Decoupling heating from electricity and electrification through sector coupling was also raised, as was the opportunity to accelerate market transformation through innovation in product design and productization (where the automation of flexibility services is the product). In addition, hydrogen was mentioned as another important opportunity for enabling resilience across highly renewable, decentralized power systems.

Chief obstacles?

Commercial viability and regulatory impediments to it were discussed as the key obstacle in the way of DERs’ full potential in supporting the grid as flexibility sources. It was generally agreed that while technical challenges such as interoperability and cybersecurity exist, they are solvable; what is missing is market design that motivates pervasive implementation through effective price signals. 

Curiously, the need for public awareness was challenged when raised as an obstacle: would we actually require it if those who know what needs to be done went on and did it, making the right choices commercially beneficial for all? 

The other set of obstacles related to geographic location. While some countries can leverage past investments into DER integration (Australia, France and Germany were discussed as being in relatively good shape), other countries with increasingly outmoded infrastructure (the U.K. and Eastern Europe were used as examples) may not even be able to get to the starting line. The US perspective was that demand response was maturing, in part through price signals, but that integration of DERs with the grid for active flexibility services would require much greater engagement from utilities (to include evaluation of impact on the grid for each asset type and a much faster control response) than the bureaucratic reality seems to allow today.

Impact of EVs on grid flexibility?

Electric vehicles are poised to be at once a problem and a solution for the grid. Today's grid cannot support a 100% electric fleet, so the transition to a fully electric transport sector and the transition to a much more flexible power system must occur in parallel. In fact, a part of that improved grid flexibility can be provided by EVs, which are DERs on wheels. The participants were eagerly watching global developments in vehicle-to-grid innovation. 

Role of technology?

Fundamentally, the future of energy is transactive and to transact dynamically, we need instantaneous recording of transactions. Hence, the network latency (the time it takes for a signal sent to get to its destination) must be reduced through high-speed (5G) internet. Beyond that, we need AI to predict demand surges proactively and accurately -- which would reduce variability and, hence, the need for new back-up stations. Blockchain can cost-effectively enable instantaneous, infallible transactions while enhancing cybersecurity. We need both hardware and software that makes such choices the default. Here, we must connect three sets of stakeholders that don’t tend to share the same table: asset developers, owners, and operators; utilities and energy retailers; and climate tech (Powerledger’s roundtables are an effort in this direction). 

What’s next?
We hope this roundtable is a start of a deepening cross-sectoral commitment to actions that usher in a more resilient clean-power energy system.

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