Distributed Energy Resources Program

Australia's energy ecosystem is rapidly transforming towards a decentralised, scalable two-way energy system, driven by Australia's world-leading uptake of household and commercial solar generation and energy storage capabilities. 

This transformation presents the industry with an exciting opportunity to shape Australia’s energy future, as more and more Australian consumers are playing at the forefront of the energy sector, demanding new products and services from energy industry participants and in turn, AEMO.

To address these opportunities, and the technical and operational challenges that increasing amounts of distributed energy resources are having on the Australia energy system, AEMO has launched a Distributed Energy Resources (DER) Program.


What are Distributed Energy Resources?

Distributed Energy Resources – or DERs – are consumer-owned devices that, as individual units, can generate or store electricity or have the 'smarts' to actively manage energy demand. 

When aggregated and operating together at scale through micro-grids and virtual power plants (VPPs), these devices have huge potential to exchange consumer value by contributing to a reliable and secure energy supply. 

Examples of DER devices include:

  • Rooftop solar photovoltaic (PV) units
  • Wind generating units
  • Battery storage
  • Solar farms
  • Hot water systems, pool pumps and air conditioners
  • Smart appliances and smart meters

AEMO’s DER Program

The DER Program seeks to ensure a smooth transition from a one-way energy supply chain – starting with large-scale generation units to consumers – to a world-leading system harnessing electricity and energy-related services from DER devices scattered throughout Australian homes and businesses into the electricity grid.

A smooth transition means that DER devices are 'plugged into' the electricity grid in a way that supports energy system reliability and security, and maximises the value of DER for Australia’s energy consumers.

By creating a two-way energy system and two-sided marketplace with open energy networks, the DER Program will offer Australian energy consumers:

  • Access to new value and choices of energy services
  • The ability to integrate more DER in a consistent way across the grid to more efficiently manage grid stability
  • Rewards and incentives when consumers exchange DER services with the grid
  • Increased visibility of energy usage and a better energy future for all Australians

DER Program workstreams

Several workstreams have been established to address the effective market and technical integration of DER into the electricity system.

  • Markets and framework: Market design of a new two-way energy system and two-sided DER marketplace aligned with the Open Energy Networks initiative’s Hybrid Model. This Hybrid Model for smart grid architecture features a central market platform (operated by AEMO) in which DER can participate - via an aggregator or energy retailer – to provide wholesale energy and/or ancillary services to the electricity grid and market.
  • Pilots and trials: Design and execution of small-scale, innovative trials such as a DER marketplace, demand response mechanisms, Virtual Power Plant models, which will inform evidence-based changes to regulatory and operational processes so that DER devices can be effectively integrated into the electricity grid and markets. This work maximises power system security and sustains a reliable energy supply.
  • Operations: Examination of how DER assets behave during power system disturbances, and development of models to predict and manage DER performance in the future power system, together with ensuring adequate tools are in place to manage a high DER world. This work ensures a sustainable, secure and reliable energy supply.
  • Data and visibility: Development of a database of DER installations – the DER Register – to provide visibility of DER specifications and locations, enabling effective grid integration.
  • Standards and protocols: Uplift of Standards (e.g. AS4777 and AS4755) and guides to ensure optimal DER technical performance and energy system security and enhance interoperability and cyber security protection.
  • Engagement and collaboration: To deliver these workstreams, AEMO is working with a wide range of stakeholders from the energy sector, public sector, consumer forums, regulatory bodies and research agencies. Some key DER Program partners include ARENA, Energy Networks Australia, Consumer Groups and the Distributed Energy Industry Program participants. 

How to get involved in the DER Program

  • Stakeholder engagement: AEMO offers interested stakeholders the opportunity to participate and engage in shaping and developing the DER Program and associated workstreams as part of the DER working group.
  • Education: A series of information sessions will be scheduled to share insights and progress of the DER Program workstreams. More information about DER Program education courses can be found at AEMO Learning Academy or email: energyeducation@aemo.com.au
  • Quarterly Progress Reports: AEMO will publish the status of the DER Program workstreams from Q2 FY20.

For more information about the DER Program

Email us: derprogram@aemo.com.au 

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