Analysis of the key issues in the provision of bulk electric grid services by distributed energy resource aggregations

Padmanabhan, Rajaraman

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Description

Title

Analysis of the key issues in the provision of bulk electric grid services by distributed energy resource aggregations

Author(s)

Padmanabhan, Rajaraman

Issue Date

2017-04-24

Director of Research (if dissertation) or Advisor (if thesis)

Sauer, Peter W.

Department of Study

Electrical & Computer Eng

Discipline

Electrical & Computer Engr

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

M.S.

Degree Level

Thesis

Keyword(s)

• Distributed energy resources
• Bulk electric grids
• Wholesale electricity markets

Abstract

The global concern for climate change and the goal for energy independence are major drivers of the deepening penetration of distributed energy resources (DERs) — which include renewable resources (RRs), demand response resources (DRRs), and energy storage resources (ESRs). However, the deepening penetration of RRs is often limited by the inability and unwillingness of bulk grid operators to expand their transmission grids. The intermittencies associated with RRs and the exacerbated flexibility requirements are some of the key challenges that hinder their deployment. The absence of a sufficient inventory of dispatchable resources such as DRRs and ESRs integrated into bulk electric grids further aggravates these concerns. Therefore, there is a market shift to DERs integrated into the distribution grids for the provision of energy, capacity and ancillary services in bulk electric power systems. These resources are largely integrated into distribution grids and may participate in retail or utility programs; therefore, they represent an untapped potential at the bulk electric grid level. The entry of these resources as potential participants in the bulk electricity markets enhances the opportunities for clean energy utilization, broadens the scope of wholesale market competition and expands the range of customer options on their source of electricity. In order to harness their outputs for the provision of bulk electric grid services, the notion of resource aggregation serves as the primary modality by which small DERs may be harnessed as part of an aggregation to provide services that are palpable to the bulk system operator. Resource aggregation provides a platform for DERs to participate in whole- sale electricity markets, as in the case of DRRs and vehicle-to-grid (V2G) mechanisms. Such distributed control actions for DERs also help overcome the market barriers that previously hindered their participation. The effective utilization of DERs in bulk electricity markets also creates a good scope for their wide scale deployment, creates new revenue streams that defray the returns on their investments, helps transmission system operators comply with their operational objectives and defer additional capacity expansion investments. Recognizing these benefits of harnessing DERs in bulk electric grid operations, the Federal Energy Regulatory Commission (FERC) took a major step forward when it approved the 2016 California Independent System Operator (CAISO) initiatives for its DER provider framework and ESR tariff revisions, which collectively remove barriers for DER participation, establish a framework for the provision of bulk electric grid services by DER aggregations (DERAs), and attempt to modify the treatment of ESRs in its wholesale markets. As an aftermath of these decisions, FERC also issued a notice of proposed rulemaking (NOPR) to extend these decisions to all the organized wholesale electricity markets in the U.S., as per individual market regulations. These exemplary moves are harbingers of future energy policy initiatives that redefine the role of DERs (particularly ESRs) and modify their treatment in electricity markets. In this thesis, we present the development of a conceptual multi-layer framework for the simulation and analysis of issues that must be addressed to allow the smooth integration of DERAs into bulk electric grids and their associated wholesale electricity markets. We analyze the salient characteristics of the DERA paradigm and describe the various entities involved. The proposed framework may be implemented as a vehicle to quantify the impacts of the interactions between the various market players, and gain valuable insights to understand how DERs may be harnessed for the provision of services other than those that were originally intended. The DERA may be treated as an abstraction of the virtual power plant (VPP) concept. Under the DERA paradigm, distribution microgrids and community DER projects may participate in the provision of bulk grid services. We assess the role of a new market entity – the DERA operator (DERAO) – who serves as the market participant on behalf of the DERA and helps the transmission system operator maintain the supply-demand balance around the clock. We discuss the role of the DERAO in the DERA scheduling operations to provide bulk grid services and participate in the associated markets. We also investigate via case studies the key opportunities and challenges for DERA participation in wholesale electricity markets that may be of interest in energy policy and in the evolution of new business models for DER aggregation strategies.

Graduation Semester

2017-05

Type of Resource

text

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Copyright and License Information

Copyright 2017 Rajaraman Padmanabhan

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