Australia has almost 1 in 4 houses with solar photovoltaic (PV) systems and more than 100,000 residential batteries. These technologies, known as Distributed Energy Resources (DERs), are also creating opportunities for their owners to provide services to the Australian Energy Market Operator (AEMO) through aggregators. However, as the volume of DER providing services increases, it is important to ensure the integrity of the poles and wires that houses are connected to.
Project EDGE is a world-first project that brings together the spectrum of relevant stakeholders across the electricity value chain: customers, DER owners, aggregators, distributors, the system/market operator and researchers. Several innovations will be demonstrated through trials that will test operating envelopes and the trading of local services. This is crucial to understand the complexity, interactions and challenges that distribution companies (and the electricity sector) will face globally as they continue to accommodate the widespread adoption of DER . Project EDGE will also inform ongoing efforts on future electricity market design, particularly so-called two-sided markets.
A key advantage of using operating envelopes is that it allows distribution companies to ensure network integrity without having direct control of DERs or the aggregator. This makes better use of existing infrastructure and increases the efficiency of the overall electricity value chain. Ultimately, it should help to reduce electricity costs for consumers, particularly as more and more DERs are being installed across Australia.
Project EDGE was awarded funding in 2020 by the Australian Renewable Energy Agency (ARENA) and is a collaboration involving AusNet Services, Mondo, the Australian Energy Market Operator (AEMO) and the University of Melbourne. Our part is a 2.5-year project which runs from Oct 2020 to Apr 2023 and involves the development of the algorithms for the operating envelopes and the service co-optimisation.
What are Operating Envelopes?
Operating envelopes are time-varying export or import limits calculated by distribution companies (who manage the poles and wires), in real time or in advance, at the connection point of the customer (where the meter is). This information is then given to aggregators who must adhere to it when managing their DER portfolios. While operating envelopes can ensure network integrity, implementing them in practice can be challenging, ranging from different data requirements (accurate network models, smart meter data, forecasts, etc.) to social and economical considerations (market design, consumer acceptance, fairness, etc.).