IEEE Power & Energy Magazine - May/June 2017 - 82

✔ Digital system protection. System protection, adap-

tive to system conditions, will need to be widely used.
DERs with inverter technologies create various oper-
ating scenarios not addressed by existing protection
schemes. Circuit power flows and fault-current levels
will change based on DER size, output, and location.
✔ Emerging alternative distribution grid configurations
and operation modes. These include grid-integrated mi-
crogrids and closed-loop distribution feeders that allow
utilities to take advantage of the potential benefits de-
rived from DER adoption. It is worth noting that these
require protection, sectionalizing, monitoring, automa-
tion, and, most importantly, control capabilities beyond
those typically used in distribution systems today.

The Role of Markets in Grid Modernization
The ongoing evolution of the electric power industry also
involves changes to existing electricity market and regula-
tory frameworks, aimed at satisfying the growing expecta-
tions of end users. The advanced monitoring, protection,
automation, and control infrastructures and capabilities
introduced by grid modernization are vital enablers for the
successful implementation of these initiatives.
In the specific case of electricity markets, transactive energy
(TE) and distribution system operator (DSO) are two concepts
being widely discussed as key elements in the utility of the
future to integrate DERs with wholesale markets and apply
market concepts to DER dispatching and operations on the
distribution system. The focus of these discussions ranges
from radically new paradigms to the application of wholesale
market design to the distribution system, including the intro-
duction of distribution locational marginal pricing.
TE advocates envision a future market where a "plat-
form" allows buyers and sellers to find each other and where
the energy markets are built around bilateral, individual
transactions ranging from real time to months forward.
These models take other commodities markets as their guid-
ing principle. However, TE models have so far not shown
how real-world implementation-including reliability issues
and obligations to critical customers-can be made to work
and so are not yet considered mainstream.
The DSO (also called a distribution system platform)
model is becoming more mainstream, linking requirements
to mutually coordinate DER markets and the grid. Basically,
current wholesale concepts of day-ahead, hourly, and real-
time markets using locational pricing to manage conges-
tion are the guiding principles for the model. Considerable
theoretical work, including some rigorous cost-benefit stud-
ies, has been done in this area. And, while some alternative
schemes might need to be appended, the concept seems to
hold promise as a blueprint for bringing DERs to market.
New York's ongoing Reforming the Energy Vision program
is seriously considering the model.
However, as the DSO model is based primarily on the
wholesale model (which relies on gross profits from dynamic
82

ieee power & energy magazine

energy markets and ancillary prices to incentivize invest-
ments in generation as needed), more analysis is needed. For
example, any (in fact, one could argue, most) DER locational
needs will not reduce congestion but will be able to avoid
backfeed (curtailment or local energy storage) and manage
voltage and power fluctuations. These may turn out to be
both "zero marginal cost" kinds of resources and also ones
with significant capital costs-in which the relationship to
the energy markets is tenuous, especially in the case of volt-
age support. So alternative schemes such as distribution-level
capacity markets may be called for. Furthermore, advanced
sensors and tools are required to properly operate the distri-
bution market. The conclusion is that initial DSO functional-
ity and design should "keep things simple" to avoid error-
prone complexity and be robust against likely early-stage
data base and data errors.

Recommendations
To conclude, we detail some overarching recommendations
for achieving reliable, resilient, and cost-effective delivery of
electric energy, while supporting environmental targets for
years to come. The following are some basic principles.
✔ There is a need for grid modernization, with speed of
implementation adjusted to the realities of each mar-
kets pace of integration of clean DERs and environ-
mental and other regulatory targets.
✔ The architecture and design of the grid must be
updated to accommodate a very high penetration
of DERs and operations and planning practices
driven by prosumer dynamic consumption/produc-
tion patterns.
✔ Enabling the transition to a modern grid requires
changes in business models and regulatory policies,
as well as the identification of technical needs for de-
veloping new technologies.
✔ A continuous focus on improving reliability, resil-
ience, safety, cost-efficiency, and customer flexibility
in terms of choice is crucial.

Actions That Utilities Can Take Today
✔ Vision

*	Develop a vision for the modernized future grid that
includes, for instance, a high penetration of DERs;
alternate distribution system architectures (such as
looped or meshed networks for enhanced operational
flexibility, resiliency, reliability, and power quality);
and incorporation of advanced power electronics for
grid control.
✔ Implementation
*	Pursue grid modernization within regulatory frame-
works, such as California's integrated DERs and
DRP filings and plans to address the integration of
DERs. Combine grid modernization with synergistic
needs to address future safety, reliability, aging in-
frastructure, and capacity requirements.
may/june 2017



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