Integration of Ders on Power Systems: Challenges and Opportunities

The integration of large amounts of distributed energy resources (DERs) as photovoltaic solar generation, micro-cogeneration, electric vehicles, distributed storage or demand response pose new challenges and opportunities on the power sector. In this paper, we review the current trends on: i) how consumers adopting DERs can self-provide energy services and provide other services at system level, ii) what can be expected at distribution networks and how retail markets will evolve with more proactive and market engaged consumers, iii) what are the effects and integration of DERs on wholesale markets, and iv) what are the challenges that DERs pose on cybersecurity and the opportunities for improving system resilience. Several recommendations are given for achieving an efficient integration of DERs. For instance, the design of a comprehensive system of prices and charges and the elimination of existing barriers for market participation are crucial reforms to achieve a level playing field between distributed and centralized resources when providing electricity services. This paper summarizes part of the work developed under the MIT Utility of the Future study. JEL Codes: D4, L94, L95, L98