Keeping pace with the changes in electricity distribution

I’ve been in the electricity distribution sector for a bit over a year now, and every day I find myself more fascinated by the complexity of the world we’re moving into – and aware of how much more I have to learn!?

We've been discussing the major shifts in context internally at Vector Limited, and with our colleagues in other distribution businesses. We're seeing a greater push towards collaboration to enable the future, with the industry's Powering Change initiative, launched recently, being a great example of that.

Speaking of collaboration, it’s been a few months since New Zealand’s FlexForum put out an insights paper on making better use of distribution network capacity, but re-reading it recently I thought it was worth giving it a nudge on here due to the significance of some of the themes it discusses.

Some of its content mirrors discussions we've been having in Vector and the wider distribution sector:

• There is a lot of interest in increasing the use of flexible resources on distribution networks – like electric vehicle charging, hot-water load or home batteries – to minimise future investment needs. The BCG report, published last year, highlighted the importance and value to consumers of a 'smart system'. Distributors and many other parties are keen to harness this potential, and doing so will significantly increase the complexity of operating distribution networks
• Planning and managing at the low-voltage level is incredibly complex. On Vector’s network alone there are ~22,000 low-voltage sub-networks serving Auckland’s consumers
• The availability of network assets, and the utilisation of those assets, can change every hour of every day,?for many different reasons
• For decades, network planners have been able to rely on a reasonable degree of diversity of consumer behaviour. However, that could be a thing of the past.?The increase in virtual power plants – portfolios of local distributed resources operated by aggregators – responding to national market prices or system frequency, or distributed generation assets powered by the same fuel source (e.g. the sun), will mean that we’ll see increased synchronisation of load and/or generation on our networks. This could lead to large swings in power flows around our networks, and on and off the transmission grid
• I’m learning that turning off demand is relatively straightforward for a distributor to deal with, but how that demand is brought back on must be closely managed – see the excellent post my colleagues André Botha and Steve Heinen just released on this point, titled "The forgotten side of load management".

Some of these effects have been experienced for a few years now in other jurisdictions. The impact of rooftop solar PV in South Australia, for example, has been profound.

The FlexForum's paper highlights that these shifts are likely to have significant implications for how distributors plan, invest in and operate their networks:

1. As is the case with both distribution and transmission today, distribution networks won’t be sized to enable every possible combination of actions by consumers or aggregators – that would be horrendously expensive, failing the affordability objective. But we will need to be mindful of the increased synchronisation of load,?and the extreme swings in network flows it could create
2. So, by design, there will effectively be more constraints on distribution networks. At times, network capacity will be limited, and congestion will occur (just as occurs in parts of South Australia on sunny days). This means there will need to be methods to allocate available network capacity among different consumers and different aggregators, in close to real-time
3. Those consumers and aggregators will then need to ensure they only operate within the allocations (or ‘operating envelopes’) they’re provided – otherwise other network users, or the network assets themselves, will be negatively impacted. This is conceptionally similar to the transmission constraints that impact large-scale generation
4. So there will often be times when constraints on distribution networks mean distributed resources are unable to provide their full ‘nameplate’ capacity to the national market, as this would cause them to stray outside their operating envelopes. Rates of change in demand restoration will also need to be managed carefully, as noted in my colleagues' blog above?
5. In time, and as the number of distributed energy resources on the network increases, those operating envelopes will be able to be calculated and communicated in a more dynamic way, based on underlying conditions on the network?– which, as noted above, change 24-7
6. Overall, in order to keep the lights on in this new world, the role of distribution network owners and operators will look increasingly like that of the grid owner and system operator (Transpower), and we’re going to need to introduce equivalent new rules, tools and capability to make it all work.?

As a follow-up to their insights paper covering these issues, the FlexForum hosted a webinar on the introduction and application of dynamic operating envelopes (DOEs). This included a couple of excellent speakers from Australia, which is a few years ahead of New Zealand on this journey, and where DOEs are being implemented at scale.?It's well worth a watch. FlexForum's paper also references the Australian development and precedents.

As I noted above, at Vector we’re devoting a lot of brainpower to thinking about this future,?as are our colleagues in other distribution businesses here and overseas. Chapter 2 of our asset management plan, released earlier in the month, sets out the range of activities we’re undertaking. A key part of this is the development, operation and ongoing enhancement of our Distributed Energy Resource Management System (DERMS).

We’ve already got our first DOE working with one of our newer customers, Auckland Transport’s electric bus charging depot in Panmure. This is coordinated through our DERMS. Auckland Transport shared some of their experience in the FlexForum webinar linked above, highlighting the benefits of learning by doing, giving new things a go, and the further opportunities that open up when you do.

It’s an exciting journey that I'm looking forward to us going on together as an industry.?