THINKING ENERGY
DER Orchestration in the WEM
Hybrid (DSO/DMO) model for the SWIS

Written by Fabian Le Gay Brereton

Chief Executive Officer & Co-Founder BSc Computer Science (Hons) University of Western Australia

June 29, 2022

Western Australia is a global hotspot for high-penetration of distributed generation in the electricity system, and the Government proactively defined a roadmap for DER integration and orchestration in early 2020.

In line with the roadmap, Government has recently released an Information Paper defining the roles and responsibilities for DER orchestration in the WA electricity system.

This work builds on the earlier Open Energy Networks Project, which itself was heavily informed by work in the UK on the evolution of Distribution Network Operators into  Distribution System Operators or DSOs. 

What does this all mean? And what has Government decided for these roles and responsibilities to take into account the unique circumstances of Western Australia’s electricity system. Here is a quick TLDR;

Distributed Systems Operator (DSO)

Western Power will be the DSO, in line with its current role, with three main areas of focus:
1. Invest in more network monitoring
2. Move to dynamic allocation of network capacity
3. Procure more network support services

Dynamic allocation of network capacity, also known as  Dynamic Operating Envelopes means a shift from setting fixed import and export limits to setting dynamic or changing limits based on the current state of the network (taking advantage of that new monitoring), and thus increasing the amount of DER that can be hosted on the network without more augmentation (which is costly and increases costs for consumers).

Procuring network support services (NSS) means contracting with Aggregators to provide support to the network to defer network augmentation and more efficiently achieve network safety, security, and reliability standards. This could be by contracting battery storage, demand flexibility, or other kinds of resources and services. 

One thing to note is that Western Power won’t be directly controlling customer or third-party owned DER, and also, interestingly, that, because Western Power will be the sole procurer of NSS, it will not compete with aggregators by directly investing in storage itself. 

Distributed Market Operator (DMO)

AEMO will be the DMO, again largely in line with its current role as the transmission system operator and market operator. The paper largely just confirms that AEMO’s role isn’t changing and there won’t be any new or seperate DER markets created.

AEMO’s role will be to enable DER to participate in the existing Wholesale Energy Market in the form of aggregated portfolios of DERs. This is already possible for some market services, and work will be done to expand the range of market services DER can provide. 

Aggregators

Electricity Retailers will be the DER Aggregators, in line with their current role.

Retailers are the Financially Responsible Market Participant and the Network User for each connection point to the distribution network.

This means for residential and small-market customers Synergy, the State Government owned Retailer will be their DER Aggregator. 

There is still a potential role for third-parties to enter into off-market arrangements with Retailers to provide them access to DER capacity and aggregation services.

Plus ça change

Largely this paper entrenches the current roles and responsibilities in the WA electricity system, while setting out the need for these roles to evolve to support the integration and orchestration of DER as a key component of the energy supply model for Western Australia.

What the policy doesn’t do is create a new open-access distributed energy marketplace enabling new entrants to come in and own or manage customer DER and to offer network or market services independently from a customers retailer.

As the paper states, a key policy principal was to “start off simple”, and given the complexity of the transition, and the potential negative impact on consumers, this is probably wise.

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