FEBRUARY 2019
DISTRIBUTED ENERGY INTEGRATION PROGRAMOVERVIEW / DEIP AT A GLANCE
Distributed Energy Integration Program Distributed Energy Integration Program2 3
The need for change 4
What is DEIP? 5
DEIP Principles 6
Collaboration 7
DEIP Framework 8
Customer 9
Markets 10
Frameworks 11
Interoperability 12
How to get involved 13
Contents
Distributed Energy Integration Program Distributed Energy Integration Program4 5
The need for change What is DEIP?
or 7.5 GW) is already impacting traditional
grid management practices and market
frameworks.
Therefore, the review recommended that
the Council of Australian Governments
(COAG) Energy Council consider the regulatory
framework, data exchange mechanisms
and incentives to integrate DER. It also
noted a critical role for proof-of-concept
demonstration projects and the importance
of greater collaboration across industry
and market institutions.
Australia’s energy sector is at a critical
juncture and it is evident that a significant
industry-wide transformation is required to
deliver a sustainable electricity system that
meets customer expectations.
PV
Batteries
Pumping
Cooling
HeatingEVs
VPPs
DemandResponse
EnergyEfficiency
Customers’Distributed
Energy
OFF
ON
The Distributed Energy Integration Program
(DEIP) is a collaboration of government
agencies, market authorities, industry and
consumer associations aimed at maximising
the value of DER for all energy users.
Led by a steering group (see Figure 2) the
forum supports DER information exchange
and collaboration to efficiently identify
knowledge gaps and priorities and to
help accelerate reforms in the interest
of customers.
To achieve this, the steering group has
identified the need for a shared vision across
the sector as well as agreement on key
priorities to address issues associated with
the continued and rapid uptake of DER.
A key element of DEIP is to facilitate
demonstrations and research that can
help to inform potential changes to fully
integrate DER into Australia’s energy market
frameworks and operational processes.
Australia’s early adoption of DER and rising
customer interest in new technology
positions it to be a global leader in the
efficient integration of DER. A willingness
of all stakeholders to adapt positions is only
possible through effective collaboration,
and DEIP provides a unique opportunity for
industry and governments to work together.
Figure 2 – DEIP Steering Group Members
Figure 1 – Customers’
Distributed Energy
The growth of customer-owned energy
technology such as rooftop solar, batteries,
demand response and electric vehicles
(collectively referred to as distributed
energy resources or DER) has the potential
to support a reliable, affordable and lower-
emissions electricity grid. DER could supply
almost half of Australia’s electricity by 2050.
The Independent Review into the Future
Security of the National Electricity Market
identified that making best use of DER
could avoid significant future infrastructure
expenditure, reduce electricity costs for all
customers, while also enabling a transition
to a decarbonised electricity system.
The rapid uptake in rooftop solar systems
in Australia (more than 2 million households
Distributed Energy Integration Program Distributed Energy Integration Program6 7
OBJECTIVES
DEIP has the following objectives:
Target greater collaboration, research,
knowledge sharing, demonstrations
and resources.
Apply the DEIP working principles
to accelerate and reduce the cost
of the transition to a distributed
energy system.
Deliver outcomes that seek to balance
community expectations for an
affordable, reliable and cleaner energy
system through clearly prioritised
workstream initiatives.
DEIP Principles
DEIP is not an organisation and it does not
have dedicated resources. Rather, it is a forum
where organisations come together to share
insights and develop priorities.
Coordination of work programs happens
through the DEIP Steering Group comprising:
º Australian Energy Council (AEC)
º Australian Energy Market Commission
(AEMC)
º Australian Energy Market Operator (AEMO)
º Australian Energy Regulator (AER)
º Australian Renewable Energy Agency
(ARENA)
PURPOSE
“To collaborate to maximise the value of customers’ Distributed Energy
Resources to the Australian energy system for the benefit of all energy users.”
PRINCIPLES
DEIP has the following guiding principles:
Collective leadership – DEIP will develop
and project a shared vision for change.
Collaborative approaches – DEIP will
promote genuine and open collaboration
targeted at information sharing across
industry and with energy customers.
Outcomes focused – DEIP will move
quickly, and deliver real outcomes that
create value for customers and industry.
Agile and fit-for-purpose – DEIP
will build on existing work, approach
challenges flexibly, and select the best
suited techniques for each task.
Collaboration
Stakeholders
(customers, governments, industry, international expertise)
Steering Group
(agrees priorities and processes for engagement )
Secretariat
(coordination & knowledge sharing)
Two-way knowledge sharing
º Clean Energy Council (CEC)
º Clean Energy Finance Corporation (CEFC)
º Clean Energy Regulator (CER)
º Commonwealth Scientific and Industrial
Research Organisation (CSIRO)
º Energy Consumers Australia (ECA)
º Energy Security Board (ESB)
º Senior Committee of Officials (SCO)
The Steering Group is supported by a
secretariat that helps coordinate collaboration
and knowledge sharing activities.
The intent is that the DEIP Steering Group
would hold regular DEIP Dive Forums with
interested stakeholders.
Distributed Energy Integration Program Distributed Energy Integration Program8 9
DEIP Framework
LEADERSHIP
Collaborate to maximise the value of customers’ Distributed Energy Resources
to the Australian energy system for the benefit of all energy users
EXCHANGING VALUE IN MARKETS
Energy markets that efficiently
exchange the fair value from customer
owned distributed energy
MARKETS
Enabling multi-party
exchange of value
in markets within
physical network
constraints
COLLABORATION
FRAMEWORKS
Optimising investment
in and operation of
network and DER
infrastructure
KNOWLEDGE SHARING
INTEROPERABILITY
Standardising the
physical operation,
visibility and resilience
of the distributed
energy systems
DEMONSTRATIONS
CUSTOMER
Capturing and
sharing customers’
preferences to inform
the future
RESEARCH & INVESTIGATION
Pu
rpo
seFo
cus
Are
asW
ork
stre
ams
Act
ivit
ies
DISTRIBUTED ENERGY AND THE GRID
Technical systems that enable the
efficient use and operation of
the distributed energy system
Customer
INITIATIVES
Customer Insights - DEIP will work with
Energy Consumers Australia and other
customer advocacy groups to:
º establish a national DER Customer
Panel as a consultative resource
for DEIP initiatives
º consolidate knowledge around
customer segmentation and inform
stakeholders
º support and share resources that
improve insights across customer
facing funded projects.
Data & Information - DEIP will continue
to support the Commonwealth and
regulators to implement the Consumer
Data Right in the energy sector by:
º sharing project experiences
and insights
º reviewing opportunities to support
projects or studies to inform
implementation
º reviewing opportunities to support
novel ways to use consumer data
º supporting the development of
unbiased information to inform
customers.
Distributed Energy Equity - DEIP will
work with the energy sector to assess
and remove barriers for all customers
to access the benefits of DER.
OVERVIEW
This workstream seeks to enable the voice
of customers to evolve best practices, inform
protections and educate industry
and customers to make informed choices.
CHALLENGE
While customer investment in distributed
energy is transforming the power system,
the current patterns of investment (and
associated business models) are not
technically or economically sustainable.
Reforms will be required which will impact
customer decisions, product standards and
the income customers can receive from their
distributed energy assets.
To ensure this transition creates valuable
outcomes, DEIP has identified a need to:
º understand how customer preferences
might interact with potential future
reforms and explore the social licence for
alternative reform options
º understand how to leverage customer
interest in distributed energy, through
new products and services, while complying
with the required protections
º develop information and tools for customers
that helps them make informed decisions.
Distributed Energy Integration Program Distributed Energy Integration Program10 11
Markets
INITIATIVES
VPP Enablement – DEIP will seek to
enable the participation of Virtual
Power Plants (VPPs) in energy, ancillary
services and network support markets.
Focus will be on tools and techniques
that improve the functional maturity
of existing frameworks for integrating
distributed energy. This may include
upgrades to AEMO’s systems and third
party platforms to enable greater VPP
participation in markets
Demand Response Integration – DEIP
will inform the Demand Response Rule
changes currently being considered by
the AEMC. Focus will be on investigating
innovative approaches to determining
electricity baselines, scheduling
wholesale demand response and network
constraints management.
Distribution-Level Optimisation – DEIP
will continue to monitor and support
the AEMO-ENA Open Energy Networks
process. Focus will be on supporting
projects or studies that consider market-
based mechanisms or other solutions
that optimise DER participation in
markets within distribution level network
constraints.
OVERVIEW
This workstream will help to improve
market frameworks that can be barriers to
transitioning the market to extract better
value from DER use.
CHALLENGE
Adapting market frameworks is required to
efficiently value and facilitate DER service
transactions, including demand response,
in real time.
AEMO and the AEMC are leading several
market-based trials including VPP trials
and demand response integration.
These trials are important as delays in
maturing market frameworks increase
the risks of over and under investment in
DER, potentially increasing the cost of the
transition to a high-penetration distributed
and renewable grid.
Addressing commercial barriers to the
participation of demand response in the
market facilitates its ability to enable high
penetrations of renewables.
Frameworks
INITIATIVES
Value Assessment – DEIP will consider
the customer and whole-of-system value
of the services that can be provided
by DER. These services can be used in
future business cases for expenditure
or investment by networks, customers
or aggregators either in increased DER,
or by networks increasing their hosting
capacity for DER. Part of this work
includes clearly defining the various
services DER can provide to network
operators.
Evaluation Techniques – DEIP will
support the development of case studies
and methodologies to inform decisions
by network businesses and the AER on
efficient expenditure for monitoring
DER hosting capacity and investing in
capacity improvements.
This would draw on specific modelling
of how valuation methodologies could
be applied in different network contexts.
Network Hosting Capacity Baselining
– DEIP will consider how to determine
hosting capacity baselines from which
the benefits of new investment can be
measured and where DER can be better
utilised without additional investment.
Baselines could be trialled on specific
network areas and tested against actual
DER penetration rates.
OVERVIEW
This workstream will consider the ways
to utilise existing regulatory frameworks,
or potential reforms to the frameworks,
to promote investment in the operation
of DER and supporting infrastructure.
CHALLENGE
The falling cost of DER are increasing the
options available to manage electricity
networks for network and system operators.
However, current regulatory frameworks
covering network expenditure and pricing
may not incentivise the use of DER to its
fullest potential. Networks may also lack
confidence in non-traditional DER based
approaches, which are relatively immature
by industry standards.
Innovative and complementary mechanisms
as well as outcomes from ARENA funded trials
could help DER-based integrated solutions
become mainstream.
The information gap around the current
extent of hosting capacity and methods
to measure it creates uncertainty around
new enabling investments.
Distributed Energy Integration Program Distributed Energy Integration Program12 13
Interoperability
OVERVIEW
This stream will focus on efficient and
effective systems, standards and protocols
to ensure an appropriate balance between
operability, flexibility and security of
both the electricity grid and distributed
energy systems.
CHALLENGE
Full participation of DER in the future power
system will require limitations so that they
are operated up to, and within, local
network constraints.
This will require new methods for assessing
and communicating between networks,
market operators and DER service providers
using standardised, secure and reliable
monitoring and communication protocols.
This, in turn, may need to be reflected in the
technology such as meters, inverters, load
control devices and distribution network
management systems.
There is a significant risk that delays in
establishing interoperability and cyber
security standards could result in current
DER assets becoming stranded or
under-utilised in the future.
How to get involved
Interested stakeholders can get involved by:
º Registering your interest to participate
in future knowledge sharing and DEIP
workshops
º Contacting the DEIP secretariat by
filling in the online form at
www.arena.gov.au/deip
º Approaching ARENA directly with
funding applications at
www.arena.gov.au/funding/programs
INITIATIVES
Grid Connections – DEIP will support the
development of innovative techniques
to improve the grid connection process
for DER. This will include supporting
Energy Networks Australia to develop
suitably standardised DER connection
policies across all Australian networks
which consider the interoperability of
DER and streamlining the grid connection
and market registration experience for
customers, installers and VPP aggregators.
Enhanced Visibility, Forecasting & Control
– DEIP will focus on improving
the operational visibility and control
of DER. This will include:
º improving ability to forecast the
operational characteristics of active
and passive DER
º providing greater visibility to customers
and installers of the network’s local
hosting capacity
and constraints
º standardising communication protocols
between DER and AEMO
and network operators to improve local
constraints balancing techniques used
to manage and mediate competing
demands for network use.
Cyber Security – Supporting the
development of best practice frameworks
and approaches for managing the resilience
of a high-DER grid to cyber-attack or
physical disruption of communications
infrastructure.
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