IEEE Power & Energy Magazine - July/August 2021 - 61

✔ Commercial product availability: The current product
market is relatively immature in terms of the offerings
of commercial platforms to integrate operating
envelopes into the control room. For instance,
data requirements, communication, and interoperability
standards for this more-active environment
are not yet well defined. They need to be agreed
upon and developed further in consultation with
the wider industry to ensure replicability. Vendor
solutions often focus on managing large-scale
DERs, typically within feeders at higher voltages
(>1 kV), and are structured around a " command and
control " approach. However, this is not suitable for
the concept of operating envelopes as the integration
challenges are within the LV feeders, and the DER
of the active customers is not being directly controlled
by the distribution company. Instead, a more
promising mode of operation is a " publish and subscribe "
approach, such that aggregators will comply
with the issued operating envelopes by the distribution
company. Therefore, this may entail the development
of bespoke solutions by distribution companies
in initial trials. Implementation experiences
will certainly help to inform and refine the technical
requirements of such products from vendors.
✔ Liquidity: The day-to-day operation of a distributionlevel
market requires sufficient " liquidity, " which, in
turn, relies on the willingness of DERs to participate in
such markets. Therefore, apart from technological advances,
adequate engagement with the customers and
the wider community is also key to make this a reality.
Reactive Power Management to Support
Network and Market Services
The feasibility NOE bounds all possible grid service envelopes.
By representing active power import/export limits as
a function of reactive power, calculated from operating envelopes
of individual DERs, the feasibility NOE can be used to
quantify the additional network capacity that can be released
through DER reactive power control. The DSO's use of reactive
power compensation devices, on-load tap changers, and
other tools can also access (further) network capacity. Presently,
the voltage profile of the network through reactive
power control is not actively managed by the DSO, and there
are many open questions, from reactive power acquisition
and dispatch to understanding DSO incentives and conflicts.
Some of these challenges are described as follows:
✔ Business model: The main challenge lies in establishing
a relevant business model for the acquisition of reactive
power from the DER. For example, it must be decided
if a reactive power market should be set up at the distribution
level or if reactive power support is contracted
via periodic agreements (e.g., every three months). The
market option might provide more flexibility to aggregators
as they can change their reactive power support
july/august 2021
for each market clearance interval, whereas contractual
agreements would provide more certainty to the DSO in
managing network constraints.
✔ Reactive power dispatch: A challenge for the DSO is
to decide which resources should be utilized for reactive
power dispatch. This is important, for example,
in the case of multiple aggregators, where the market
participation potential of one could be enhanced by
reactive power injection or absorption from another
and could result in some form of " free-riding " effect.
On the other hand, an aggregator could also be penalized
by the reactive power control carried out by
another aggregator. Therefore, the DSO must ensure
a fair allocation of costs and benefits across different
market stakeholders, such that they pay for added
benefits they receive and are compensated for the lost
opportunity they incur, as relevant.
✔ DSO incentives: Incentives need to be in place for the
DSO to manage the network to ensure maximum market
participation of aggregators, especially given the
increased complexity of including reactive power in
operating envelope calculation.
✔ DSO conflicts of interest: DSO control over reactive
power dispatch may create potential conflicts;
for example, the DSO could prioritize reactive power
dispatch for minimizing network losses rather than
increasing aggregator market participation. This highlights
the importance of transparency and the need to
develop procedures for the DSO to identify and manage
its potential conflicts of interest.
Moving Forward With Trials
The adoption of operating envelopes, coupled with the establishment
of a distribution marketplace, is expected to make
it possible for DER owners and aggregators to continue participating
in wholesale markets and grid services without distribution
companies worrying about poles and wires. This, in
turn, could potentially lead to lower electricity costs, thanks
to cheaper flexibility and fewer investments/augmentation on
the distribution side. But for these concepts and their potential
benefits to become a reality, we need trials that bring together
the complete spectrum of key stakeholders: from DER owners
to the aggregator, the distribution company, and, finally,
the system operator. This is crucial in understanding the
future complexity, interactions, and challenges that distribution
companies in Australia and around the world will face in
the future to manage widespread DER adoption while making
the most of the existing electricity infrastructure.
One notable example is the Energy Demand and Generation
Exchange (EDGE) project in Australia. The EDGE
project (started in 2020) was funded for three years by the
Australian Renewable Energy Agency and has as key participants
Australian Energy Market Operator (system operator),
AusNet Services (distribution company), Mondo (DER
aggregator), and the University of Melbourne (research and
ieee power & energy magazine
61
IEEE Power & Energy Magazine - July/August 2021

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - July/August 2021
