Sun shining on solar panels

Written by by Professor Lachlan Blackhall, Head, Battery Storage and Grid Integration Program, Australian National University. This article originally appeared in Utility Magazine.

Around Australia, we are currently seeing significant uptake of distributed energy resources (DER) including solar PV, residential and suburb-scale battery storage, and electric vehicles. Overwhelmingly, DER are being installed in the medium and low voltage segments of electricity distribution networks. Electricity distribution networks provide the electrical connection from customers to the overall electricity grid, allowing two-way energy flows between the customer and the system. For this reason, electricity distribution networks are said to provide the last mile of electrical connectivity.

It is widely acknowledged that DER can contribute to energy reliability and energy security, reduce power bills and support energy equity, all of which represent significant benefits to our electricity system.

However, without appropriate coordination, DER can result in dynamic two-way flows of energy that threaten the physical or operational limits of electricity distribution networks.

In this context, there are open questions about what new technology capabilities, regulations and market mechanisms are necessary to support the integration of DER without breaching the physical and operational limits of distribution networks.

Through our work in the ARENA and NSW Government-funded evolve DER Project, we are exploring the use of dynamic operating envelopes as one way of addressing these questions.

A dynamic operating envelope supports DER integration by providing a clear signal of the available power transfer capacity (both generation and load) that can be accommodated by each DER customer before physical or operational limits of a distribution network are breached.

Dynamic operating envelopes thus provide limits at the customer connection which change over time and allow owners of DER to choose how to respond when the distribution network is reaching technical and operational limits.

While dynamic operating envelopes have emerged as a mechanism for managing the significant reverse flows of energy experienced due to the rapid uptake of solar PV, their usefulness extends well beyond that.

As an example, for customers with both solar PV and batteries, the dynamic operating envelope signals implicitly that it is better to defer charging of the battery until peak periods of energy generation (i.e. during the middle of the day).

This example highlights one of the advantages of dynamic operating envelopes in that they provide clear signals to customers about how to modify DER asset behaviour, without being prescriptive about how this is achieved.

Deferring battery charging in this way to soak up solar generation when it might cause network voltage or thermal breaches is unlikely to reduce the total generation, nor impact the return on investment of solar PV or battery storage.

Dynamic operating envelopes don’t just help support the integration of solar PV and battery storage – they will also be foundational in supporting the integration of electric vehicles.

As all cars become electric, there could be significant distribution network impacts due to the correlated charging of electric vehicles. In this scenario, a dynamic operating envelope would provide a clear signal to customers to defer or reduce the power of EV charging to avoid breaching voltage or thermal constraints in the network.

Last but certainly not least, one of the key use cases identified for dynamic operating envelopes is that the additional network capacity can be used by DER assets to participate in markets for energy and ancillary services.

In this context, DER assets can participate in markets only up to the limit of the operating envelope. This ensures that DER market participation cannot infringe the safe and secure operating limits of the electricity distribution network.

Research conducted by the Battery Storage and Grid Integration Program at the Australian National University, has identified numerous advantages for using dynamic operating envelopes to support DER integration. For example, they can:

  1. Enable greater hosting capacity for solar PV, battery storage and electric vehicles
  2. Reduce network congestion, thereby avoiding costly network upgrades
  3. Increase network utilisation, thereby reducing prices for all network consumers
  4. Support new business models for DER aggregation and participation in markets for energy and ancillary services
  5. Be simple to implement across a variety of different DER assets. This can reduce the compliance costs of DER integration broadly

Implementing dynamic operating envelopes requires significant technical and technological development. Such development is the focus of the evolve Project.

The project is developing new software and algorithms that implement dynamic operating envelopes across networks in QLD and NSW.

In particular, we are working on methods for calculating and communicating dynamic operating envelopes, including the implementation of standards-based communication approaches. Our recent ARENA knowledge sharing report¹ delves further into the calculation and use of dynamic operating envelopes.

While implementing dynamic operating envelopes requires a strong focus on developing new technical and technological capabilities there are also important social, economic and regulatory issues that also need to be considered.

Key amongst these issues are the principles by which dynamic operating envelopes allocate the available network capacity. This has important implications for supporting customer equity and social license for the uptake of dynamic operating envelopes.

We are exploring these crucial issues further as founding members of the Dynamic Operating Envelopes Working Group² that is running as part of the Distributed Energy Integration Program (DEIP).

Through this working group, we are engaging broadly with stakeholders and working through the breadth of socio-techno-economic development and regulatory reforms that will be needed to see dynamic operating envelopes adopted nationally.

As the amount of DER continues to grow over the coming decades, it is vital that we enable our electricity and energy system to accommodate and support the participation of DER. Our work on dynamic operating envelopes is key to achieving this important outcome.

While dynamic operating envelopes are one of the foundational components of integrating DER, they are only one of the new capabilities and systems that are needed to support the integration of DER.

Through our current and future work, we look forward to designing the building blocks of a fully DER-enabled system to unlock the benefits of DER for all energy users.