Traditional power utility business models are becoming increasingly challenged by fundamental market changes.
Within the last few decades, the emergence of widely-distributed variable output renewable energy generation has accelerated to completely transform the characteristics of the energy mix. This transformation has been coupled with other factors such as deregulation, urbanization and steadily growing energy demand, as well as widely-anticipated developments like the roll-out of electric vehicles.
As renewables replace conventional thermal generation, the ability of the grid-operators to respond to fluctuations in supply and demand whilst maintaining stable frequency and voltage is becoming far more difficult.
There is, for instance, the potential for voltage excursions both during steady state operations, such as during the day in solar-heavy areas, but also during transient operations if bigger loads or generation is tripping in or out, for example during changing cloud cover.
Conventional synchronous generating facilities have traditionally provided reactive power to support a steady voltage on the transmission and distribution system. As the number of synchronous generators is being steadily reduced, this source of reactive power is being eroded and different technologies have to take over and provide the essential reactive power to support the grid and guarantee a stable voltage supply.
While it is possible for distributed renewable technologies to perform this function – in some regions new renewable generation is required to deliver reactive power for example – there are a number of potential problems that must also be resolved to achieve this. A key issue is the grid code, which must be adapted to accommodate the central control of thousands of inverters distributed across the network with all the associated requirements for cybersecurity and other quality standards. In addition, accurate simulation and modelling of such a network is extremely difficult.
In the face of the evolving power generation portfolio and these kinds of challenges in effectively and accurately controlling distributed generation, regulatory authorities are now pursuing alternative mechanisms that can support grid stability functions.
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