Managing Distributed Energy Resources in a Smart Grid Environment: A review for incentives, aggregation and market design

In many places worldwide the amount of connected distributed energy resources (DER) at the distribution grids is increasing. The electricity feed-in and consumption of those resources requires an adaptation of the system management in order to secure reliability of supply. As it is the case already at high voltage levels under responsibility of the system operator, different trading options like contracts for ancillary services and balancing markets could provide opportunities for economic efficient supply of system flexibility services on lower voltage levels. In a situation with smart metering and real-time management of distribution networks, similar arrangements could be enabled for medium and low voltage levels. This paper reviews distributed energy resources from a technical perspective, the related system needs for electric flexibility and the economic and technical arrangements like load aggregation and tariffs to incentivize efficient operation of DER.