Distribution system operators in the US indicate that there are system design constraints that could limit the deployment of local solar and clean power (distributed energy resources – DER) to no more than 10 to 20%. How did Germany overcome these seemingly insurmountable concerns regarding high penetration of local renewable power? While many scholars and experts debate the approach Germany utilized to achieve a non-high head hydro renewable energy goal of 30%, a recent UL research study uncovers how they built the foundation for this accomplishment. The footing for this transformation is a self-healing distribution system and restructured electricity market while the foundation walls include an independent system operator (ISO) and distribution system operators (DSOs) that provide for and manage grid price signals and demand response services.
These ISO and DSO foundational elements include private microgrids and utility microgrids with distribution level generation and customer demand response in real-time to stabilize the grid during large changes in renewable power output or customer demand. This capability is enabled by self-healing distribution system and a real-time energy market platform.
The result is private sector innovation and investment that created a system-wide network of virtual power plants (VPPs) and microgrids that correct grid imbalances in seconds. There are now more than 30 active VPPs using artificial intelligence to control massive amounts of local generation and load in real-time. A solar eclipse in March of 2015 verified the VPPs ability to manage grid stability when 80% of the sun’s light was blocked for about 3-hours. Overall, German grid reliability continues to get better with increasing amounts of renewable generation.2
“The Story of Germany’s experience is essentially one about balancing the grid and keeping it stable by enabling grid operators, renewable energy suppliers, and customers to work together to ensure grid stability”
Germany completely reimagined and redesigned a regulatory and operating model to create a competitive and price responsive grid. This included:
- Modernization of electricity distribution systems to embed automated smart switching and redundancy that provides for real-time self-healing distribution and two-way power flow.
- ISO markets that allow for competitive long term bi-lateral contracting so that customers can choose their generation supplier while also offering real-time hourly power-pools that enable customers and generators to compete to address system imbalances in real-time.
- Ancillary service payments to generators and customers that value transmission and distribution level services including demand response, power quality services, and voltage support.
- Standards that enable optimization of this new electricity marketplace while also holding new private sector entrants accountable to rigorous performance criteria. For example, the European Union created EN 50160 to ensure consistent standards for power quality.
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