分散式灵活性和可再生能源的整合——德国的经验和对中国的展望（英文版）-GIZVIP专享VIP免费

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Sino-German Energy Transition Project

Decentralized Flexibility and

Integration of Renewable

Energy

Experiences in Germany and Outlook for China

Legal Information

Publisher:

Deutsche Energie

-Agentur GmbH (dena)

German Energy Agency

Chauss

eestraße 128 a

10115 Berlin, Germany

Tel: +49 (0)30 66 777

-0

Fax: +49 (0)30 66 777

-699

-mail: info@dena.de

Internet:

www.dena.de

Authors:

Tim Mennel, dena

Hrvoje Brlecic Layer, dena

Lisa Strippchen, dena

Anders Hove, GIZ

Wenyun Qian, GIZ

Date

/2022

Please

quote as:

Deutsche Energie

-Agentur (Publisher) (dena, 2022) “Decentralized Flexibility and Integration of Renewable Energy”

The

report “Decentralized Flexibility and Integration of Renewable Energy” is published by the German Energy Agency (dena) as part

of the

Sino

-German Energy Transition Project. The project supports the exchange between Chinese government think tanks and German researc

institutions to strengthen the Sino

German scientific exchange on the energy transition and share German energy transition experiences with

a Chinese audience. The project aims to promote a low

-carbon-oriented energy policy and help to build a more effective, low-

carbon energy

system in China through international cooperation and mutual

ly beneficial policy research and model

ling. The project is supported by the

German Federal Ministry for Economic Affairs and Climate Action (BMWK)

as part of the Sino-Germ

an Energy Partnership, the central platform

for energy policy dialogue between Germany and China on a national level. From the Chinese side, the National Energy Administration (NEA)

supports the overall steering. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH leads the project implementation in

cooperation with t

he German Energy Agency (dena) and Agora Energiewende.

1 Distributed generation and decentralized flexibility in Germany .................................................................................. 5

1.1 Development of distributed generation 2000-2022 ..................................................................................................................... 6

1.2 Deployment of storage and DSM in Germany today .................................................................................................................... 7

1.3 German and EU policy targets for decentralized renewable energy and flexibility .................................................................. 7

2 Technical challenges of electricity systems with high share of variable renewables ................................................. 9

2.1 Challenges in distribution grids ....................................................................................................................................................... 9

3 Flexibility for grid integration of distributed renewables ............................................................................................. 13

3.1 Flexibility as a remedy for problems on the distribution and system level ............................................................................. 13

3.2 Flexibility in the distribution grid .................................................................................................................................................. 13

3.3 Aggregation of decentralized flexibility ........................................................................................................................................ 15

4 The use of decentralized flexibility in German distribution networks ........................................................................ 17

4.1 User-sited battery electricity storage ............................................................................................................................................ 17

4.2 Demand side management (DSM) ................................................................................................................................................ 20

5 Application to China ............................................................................................................................................................. 25

5.1 Distributed generation in China .................................................................................................................................................... 25

5.2 Distributed storage ......................................................................................................................................................................... 28

5.3 Centralized storage ......................................................................................................................................................................... 28

5.4 Demand-side management ........................................................................................................................................................... 29

5.5 Coal plant flexibility ......................................................................................................................................................................... 30

5.6 Ancillary service markets................................................................................................................................................................ 30

5.7 Relevance of German experience ................................................................................................................................................. 31

5.8 Suggestions for decentralized flexibility in China ....................................................................................................................... 31

List of figures .................................................................................................................................................................................. 33

List of tables ................................................................................................................................................................................... 34

References ...................................................................................................................................................................................... 35

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Sino-GermanEnergyTransitionProjectDecentralizedFlexibilityandIntegrationofRenewableEnergyExperiencesinGermanyandOutlookforChina2LegalInformationPublisher:DeutscheEnergie-AgenturGmbH(dena)GermanEnergyAgencyChausseestraße128a10115Berlin,GermanyTel:+49(0)3066777-0Fax:+49(0)3066777-699E-mail:info@dena.deInternet:www.dena.deAuthors:TimMennel,denaHrvojeBrlecicLayer,denaLisaStrippchen,denaAndersHove,GIZWenyunQian,GIZDate:8/2022Allrightsreserved.Alluseofthispublicationissubjecttotheapprovalofdena.Pleasequoteas:DeutscheEnergie-Agentur(Publisher)(dena,2022)“DecentralizedFlexibilityandIntegrationofRenewableEnergy”Thereport“DecentralizedFlexibilityandIntegrationofRenewableEnergy”ispublishedbytheGermanEnergyAgency(dena)aspartoftheSino-GermanEnergyTransitionProject.TheprojectsupportstheexchangebetweenChinesegovernmentthinktanksandGermanresearchinstitutionstostrengthentheSino-GermanscientificexchangeontheenergytransitionandshareGermanenergytransitionexperienceswithaChineseaudience.Theprojectaimstopromotealow-carbon-orientedenergypolicyandhelptobuildamoreeffective,low-carbonenergysysteminChinathroughinternationalcooperationandmutuallybeneficialpolicyresearchandmodelling.TheprojectissupportedbytheGermanFederalMinistryforEconomicAffairsandClimateAction(BMWK)aspartoftheSino-GermanEnergyPartnership,thecentralplatformforenergypolicydialoguebetweenGermanyandChinaonanationallevel.FromtheChineseside,theNationalEnergyAdministration(NEA)supportstheoverallsteering.TheDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)GmbHleadstheprojectimplementationincooperationwiththeGermanEnergyAgency(dena)andAgoraEnergiewende.31DistributedgenerationanddecentralizedflexibilityinGermany..................................................................................51.1Developmentofdistributedgeneration2000-2022.....................................................................................................................61.2DeploymentofstorageandDSMinGermanytoday....................................................................................................................71.3GermanandEUpolicytargetsfordecentralizedrenewableenergyandflexibility..................................................................72Technicalchallengesofelectricitysystemswithhighshareofvariablerenewables.................................................92.1Challengesindistributiongrids.......................................................................................................................................................93Flexibilityforgridintegrationofdistributedrenewables.............................................................................................133.1Flexibilityasaremedyforproblemsonthedistributionandsystemlevel.............................................................................133.2Flexibilityinthedistributiongrid..................................................................................................................................................133.3Aggregationofdecentralizedflexibility........................................................................................................................................154TheuseofdecentralizedflexibilityinGermandistributionnetworks........................................................................174.1User-sitedbatteryelectricitystorage............................................................................................................................................174.2Demandsidemanagement(DSM)................................................................................................................................................205ApplicationtoChina.............................................................................................................................................................255.1DistributedgenerationinChina....................................................................................................................................................255.2Distributedstorage.........................................................................................................................................................................285.3Centralizedstorage.........................................................................................................................................................................285.4Demand-sidemanagement...........................................................................................................................................................295.5Coalplantflexibility.........................................................................................................................................................................305.6Ancillaryservicemarkets................................................................................................................................................................305.7RelevanceofGermanexperience.................................................................................................................................................315.8SuggestionsfordecentralizedflexibilityinChina.......................................................................................................................31Listoffigures..................................................................................................................................................................................33Listoftables...................................................................................................................................................................................34References......................................................................................................................................................................................35Content4Distributedgenerationplaysanincreasinglyimportantroleintheenergytransition.WithGermanyaimingatarenewableenergyshareinitsnetelectricityconsumptionof80%by2030,upfrom45%in2021,small-scalerenewableenergysourcesconnectedtothedistributiongridmustcontributealargershareofnationalenergyoutputalongsidelarge-scalesourcessuchasonshoreandoffshorewind.Sofar,mostofGermany’sdistributedgenerationconsistsofsolarPVinstallations,bothrooftopandsmall-scaleground-mountedinstallations.Othersmall-scaletechnologiesincludebiomass,biogas,andsmall-scalehydrogeneration.By2021,Germanyhad2millionrooftopsolarPVinstallations,approximately15%ofthecountry’stotalsolarPVcapacity.Thoughsolarhelpsreducecarbonemissionsbyreplacingelectricityfromfossilfuels,itsvariableoutputcreatestechnicalchallengesforthedistributiongrid,mostnotablythermaloverloadsofnetworkdevices,violationofvoltagelimits,backfeedissues,andphaseimbalances.Fluctuatingfeed-inofrenewableenergycanleadtogeneralgenerationadequacyandstabilityproblemsonthesystemlevel,especiallyasGermanyphasesoutmoreconventionalgenerationthatcanprovidefirmcapacityandancillaryservices.Flexibilitymeasuresarethekeytosolvingthesedistributionnetworkproblemsandenablingdistributedenergytoplayafullroleinreplacingconventionalplantsinthesystem.Forthedistributiongrid,flexibilityreferstotheincreaseduseofelectricitystorage,mostlybatteries,anddemandsidemanagement(DSM).Electricitystorage:Onthedistributiongridlevel,batteriesarethemostrelevanttechnology.Batteriescanperformloadshifting,aswellasabroadrangeofgridservices,includingbalancingpower,spinningreserves,andblackstartcapacity.Behindthemeter,batteriescancontributetotheincreaseofself-consumptionandtheimprovementofpowerqualityforthecustomer.DSM:TypicaltechnologiesprovidingDSMonthedistributiongridlevelarehouseholdappliancessuchasairconditioningorheatpumpsorbusinessappliancessuchascoldstoresorchemicalprocesses.MeteredcustomerscanuseDSMinmarketappliancestooptimizetheirelectricityprocurementstrategyandreducepowerbills.Moreover,distributiongridoperatorscanengageinloadcontrolcontractswithprovidersofdecentralizedDSMtomanagegridcongestionandreducecostsforallcustomers.Theactivationofflexibilityentailschangestoelectricitysectorregulation.IntheliberalizedEUelectricitysystem,networkoperationsareunbundledfromgenerationandtrade,andtheyaresubjecttoregulatoryoversight,inparticularforgridinvestments.TheEUandmemberstateswillrequirefurtherregulatorychangestorealizethepotentialofstorageandDSM:First,gridregulationmustenablesmartgridinvestmentsuchasgridcompanycommunicationandcontroltechnologies,whichareaprerequisitefortheactivationofflexibility.Thisshouldincludemodernsmartmetertechnologiesaswellasgatewaysthatenableallconsumersandprosumerstoparticipateinreal-timeloadcontrolprogramsenablingtheuseofflexibilitybynetworkoperators,potentiallymanagedbythird-partyaggregatorcompanies.Second,flexibilityassetownersneedasuitableframeworkfortheremunerationofflexibility.Ideally,paymentfordecentralizedflexibilityshouldfullyreflectitsvaluetothesysteminavoidinggridorgenerationinvestment.Thisshouldincludetheintroductionofflexibilitymarketsorinnovativeancillaryservicesthatputloadcontrolandbatteriesatthedisposalofthedistributionnetworkoperator(DNO).Dynamicgridfeeswouldincentivizetheuseofflexibilityforcongestionmanagement.Third,regulatorsmustfurtherencourageaggregationofdecentralizedflexibilitythroughmarketdatatransparencyandmarketaccess.Independentaggregatorscanenabledecentralizedflexibilitybyprosumersandsmallbusiness,forwholesaleandbalancingmarkets.Thus,decentralizedflexibilitycancontributetoloadshiftingandsystemstability.GermanycanofferusefullessonsforChinaeventhoughtheregulatoryregimesdiffer.Chinahasseenasurgeindistributedgenerationoverthepastdecade,withdistributedsolarPVsurpassing100GWin2021,dominatedbyindustrialinstallations.Industrialcustomersareidealfordecentralizedflexibilitygiventheirgreatersophisticationcomparedtohouseholdsandaccesstoenergyservicecompanies.WesuggesttoacceleratebothenergystorageandDSM:gridproblemssuchastheviolationofthermallimitsofnetworkdevices,voltage,andbackfeedissuesarelikelytochallengeChinesedistributiongridsoncelocalitiesreachhighpenetrationratesofsolarPV.Activatingflexibilityoffersanopportunitytoaddressthesechallenges.DistributiongridoperatorsshoulduseelectricitystorageaswellasDSMtomanagecongestionproblems.Thiswillrequireincentivizingdistributedflexibilitywithappropriateremuneration.Summary:harnessingflexibilitycanovercomeVREgridchallenges5TheroleofrenewableenergyintheprimaryenergyconsumptionofGermanyisincreasing,reaching17%in2020.Renewableenergyhasgainedparticularimportanceinelectricitysupplyoverthepasttwodecades.In2021,therenewableshareofnetpowergenerationhadreachedabout45%,upfromlessthan4%in2000.Incontrast,renewablesplayaminorroleintheconsumptionsectorstoday.Inthemobilitysectorforexample,oilandoilproductsprovide90%oftheenergy.1Fossilfuelsalsoaccountforalargeshareofenergyuseintheindustryandheatingsector.Withincreasingelectrificationviaheatpumps,electricvehicles,andproductionofhydrogen,alongwithimprovedefficiency,theconsumptionoffossilfuelswilldecreaseinthosesectors.Inconsequence,electricityconsumptionwillriseoverthenexttwodecades,evenasthevariablerenewablesharealsorises.Figure1ShareofREintotalprimaryconsumptionandelectricitygenerationSource:AGEB,March20221DistributedgenerationanddecentralizedflexibilityinGermanyRenewableenergygenerationbasedonwindandsolarPVreached45%ofGermany’selectricitygenerationin2021,andwilllikelysurpass80%by2030,evenasGermanyelectrifiestransport,industry,andheating.Distributedgenerationwillmakeasignificantcontribution.AstheinstalledcapacityofwindandsolarPVrises,thesystemneedsflexibilitymeasurestobalancevariablerenewableoutput.Onthedistributiongridlevel,small-scaleelectricitystorageandDSMcancontributetothestabilityofthegrid.Duetotheirincreasingimportanceandvalue,recentGermanandEUlegislationhasfocusedonboostingbothdistributedgenerationanddecentralizedflexibility.54656244%40%17%4805005205405605806006200%5%10%15%20%25%30%35%40%45%50%19901992199419961998200020022004200620082010201620182020GrossElectricityConsumptionShareREofGrossNationalElectricityGenerationShareREofPrimaryEnergyConsumptionTWh6CurrentgrossannualelectricityconsumptioninGermanyisabout500TWh.Accordingtothe2021governmentcoalitionagreement,Germany’selectricityloadmayriseto750TWhin2030duetothecontributionofelectrification.2Meetingalargefractionofthisincreasedelectricityconsumptionwithrenewablesourcesentailsamajorexpansionofrenewableenergyinstalledcapacity.Asof2021,Germanyhad138GWofrenewablecapacityinstalledcapacity:64GWofonshoreandoffshorewindpowerand59GWofsolarPV.ThemostcommontechnologiesforPVarerooftopsolarsystemsandopenfieldsolar.Bothwindandsolararevariableenergysources,andtheirfluctuatingfeed-inposeschallengestothegrid,suchasoverloadorvoltageproblems.Incontrast,dispatchablerenewableenergysourcessuchashydroelectricityorbiomassofferlowervariabilityandeasierdispatchwithoutsupplementaryenergystorage.YethydroandbiomasshavelimitedgrowthpotentialinGermany.In2021,biomassandhydroelectricitycontributedaround11%ofGermany’sgeneration,or65TWh.Biomassandhydrosolutionswillnotbeabletocovertheexitandreplacementofconventionalsources.Mostfuturerenewablegrowthwillcomefromvariablewindandsolar,necessitatinggreaterfocusonflexibilitymeasures.341.1Developmentofdistributedgeneration2000-2022Muchoftherenewableexpansionofthepastwasduetolarge-scaleinstallationsconnectedtothetransmissiongrid,whichGermanydefinesaslong-distancetransmissionatvoltagesabove220kV.Inafuturelow-carbonelectricitysupplysystem,moregenerationwillbedecentralizedandusedwhereitisproduced.Privatehouseholdsandsmallbusinessesalreadyoperaterenewableenergygenerationunits,connectedtothedistributionnetwork,thelow-andmediumvoltagegrid.Prosumersareaclassofdistributedenergyresourceownersthatbothconsumeenergyfromdistributedresourcesandfeedaportionofoutputintothegrid.Theenergycommunityisasimilarconcept,whereneighborsnearbydirectlyconsumethegeneratedelectricity.Thereisnouniversaldefinitionofsmall-scalePV.Inthisreport,installationswithacapacityofupto1MWareconsideredsmall-scale.DistributedgenerationalreadymakesupamajorpartoftotalcapacityofrenewableenergyinGermany,mostofwhichwassolarPV.In2021,Germanyhadroughly59GWofsolarPV,locatedatroughly2millionsystems,60%ofwhichweresmallerthan10kW.5In2019,Germanyhad7.1GWofPVbelow10kW,oralmost15%ofthetotalinstalledPVcapacity.Thecapacityofsmall-scalePVbetween10and20KWwasabout4.7GWintotal,orafurther10%ofthetotal.OpenfieldPVcontributesonlysmallamountstotheinstalledcapacityofsmall-scalePV.6Figure2InstalledcapacityofPVinGermanybysizeSource:Bundesnetzagentur,20207TousefullthefullpotentialofPVgeneration,innovativeandintegrativetechnologiessuchasfloatingPVorbuilding-integratedPVwillplayabiggerroleinthefuture.BesidessolarPV,avarietyofothersmall-scalerenewableenergiesareconnectedtothegridonlowvoltagelevels.Theseincludesmall-scalehydro,biomass,andbiogas.7TheroleofbiomassandbiogasdiffersfromdistributedPVgeneration.Biomassismainlyusedforflexibility.Biogascannotonlygenerateelectricity,butcanalsobefedintotheregulargasnetworkforheating.Therearealsodecentralizedgenerationsystemsbasedonfossilfuels,suchascombined-heat-and-power(CHP)systems,oftenusingmethanegas.1.2DeploymentofstorageandDSMinGermanytodayThetransitionfromcontrollableelectricitygenerationonhighvoltageleveltowardsanenergysystemwithvariablegenerationbothonthetransmissionanddistributiongridlevelposesnewchallengestothegrid,especiallyonthedistributionlevel.Short-termvariationinrenewablefeed-incancausenetworkissues,suchasoverload,voltageproblems,phaseimbalance,andbackfeedissues.Thesemaycompromisethethermallimitsofgrids.Additionally,newloadpatternsarisingfromincreasingelectrification,maycausenewdemandpeaks,whichcanleadtogridcongestion.Itiscriticalthatprosumersassumeaconstructiverole,contributingtotheefficiencyandstabilityofelectricitysupply,andreducingcongestioncostsoravoidingunnecessaryinvestmentsingridorgenerationassets.Thekeytoachievingthisroleistheactivationandprovisionofflexibility,investigatedinthisreport.Thetwotechnicalflexibilityoptionsaredemandsidemanagement(DSM)andelectricitystorage.DSMcanhelpbalanceproductionanddemandfluctuationsbyswitchingdemandloadsonandoff,orregulatingloadsupordown.DSMusedbythedistributionnetworkoperator(DNO)canhelptostabilizethegrid,eitherviaindividualconsumers,orvialargenumbersofconsumersmanagedthroughathird-partyaggregator.Dependingonthetypeofdeviceorload,DSMcanrelievepeaksindemand,compensateforlargein-feedsfromrenewables,andreduceoperationcostsbyopeningnewwaysinplanningofoutagesandreducingtechnicallossesonthedistributionnetworksvialoadshiftingorinterruptibleloads.However,GermanystillhasonlylimitedapplicationofDSMsolutions.Electricitypricesforsmallandregularsizedconsumersdonotyetfullyreflectthecongestionandbalancingcostsofthegrid.Aggregatorservicesfacevariousbarrierstomarketentry.Additionally,manyDSMtechnologieshaveonlystartedtoenterthemarket.Section4.2givesafewexamplesandpilotprojectsforillustration.Decentralizedelectricitystoragecanserveasatechnicalflexibilitytoolandprovidebalancingenergyforbothtransmissionanddistributionnetworks.Electricalstoragecancontributedirectlytotheintegrationofrenewableenergy.Thoughmanyplayersareexploringinnovativeenergystoragetechnologies,inGermanyconventionalbatterystorageisthemostpopular.Germany’sdistributedenergystoragesystemshavegrownexponentiallyoverthelasttwoyearsascostsdeclineandproductoptionsexpand.Asof2022,Germanyhadover500,000PV-storagesystemsinstalled,withatotalstoragecapacityofabout4.4GWhandstorageoutputcapacityofabout2.5GW.8Thesestoragesystemscancontributesignificantlytotheintegrationofdistributedelectricitybyincreasingtheproportionofself-consumptionandreducingpeakloadsandpeaksolarin-feeds.Electricvehicle(EV)batteriesareanemergingfieldwithpotentialtohelpintegratedistributedenergy.In2021,newEVregistrationshaveincreasedto680,000withatotalcapacityofabout22.45GWhandtotaloutputof31GW.9Thegovernmenthasannouncedthetargetof15millionEVsinGermanyby2030.Inthefuture,EVswillserveasaflexibilityoption.Bi-directionalcharging,whichisstillofferedononlyafewvehiclemodels,wouldallowEVstoserveasanelectricitystoragedevice.PrivateEVsareparkedaround23hoursperdayonaverage,givingthemhighpotentialtoprovideeithergridservicesorstorageofdistributedrenewableoutput.Withtheelectrificationofmobility,electricvehicleswillplayamoreimportantroleinprovidingflexibilityandintegratingrenewableenergy.UsingEVsasflexibilitytoolalsoposesachallengeforthegridoperator.EVcharging,storing,anddischargingtimescurrentlylackpredictability,especiallyatthesmallestscalesofahouseholdorneighbourhood.ThecoordinationofthevehiclechargingisimportanttoensurethatEVcharginganddischargingintothegridplaysabeneficialroleinoverallsystemfunction.1.3GermanandEUpolicytargetsfordecentralizedrenewableenergyandflexibilityTheEUhassetthegoalofclimateneutralityby2050.Germanyhaseventighteneditsgoalsandstrivesforclimateneutralityby2045.Thesegoalsnecessitateamajorexpansionofrenewableenergy,includingdistributedvariablerenewableenergy.Onthegovernmentallevel,theEUandGermanyhaverecognizedtheroleofdistributedgenerationandtheneedforflexibilityoptionsforasuccessfulenergytransition.EventhoughtheEUhasnotsetspecifictargetsfordistributedgenerationorflexibilityoptions,recentregulationsincludeincentivesandobligationsfortheinstallationofdistributedenergysystems.8OnEU-level,theRenewableEnergyDirective(REDII)introducedmeasuresaspartoftheCleanEnergyforAllEuropeanspackage.Regardingtheexpansionofrooftopsolar,REDIIincludestheobligationformemberstatestousepublicandmixedprivate-publicbuildingsforinstallationsthatproduceenergyfromrenewablesources.Moreover,REDIIforbidsdiscriminatorymeasuresorconditionsforenergycommunities:“MemberStatesshallensurethatfinalcustomers,inparticularhouseholdcustomers,areentitledtoparticipateinarenewableenergycommunitywhilemaintainingtheirrightsorobligationsasfinalcustomers,andwithoutbeingsubjecttounjustifiedordiscriminatoryconditionsorproceduresthatwouldpreventtheirparticipationinarenewableenergycommunity,providedthatforprivateundertakings,theirparticipationdoesnotconstitutetheirprimarycommercialorprofessionalactivity.”10ThelegislativepackagealsoincludesprovisionsforflexibilityservicesinthedirectiveoncommonrulesfortheEU’sinternalmarketforelectricityandamendingtheElectricityDirective:“MemberStatesshallprovidethenecessaryregulatoryframeworktoallowandprovideincentivestodistributionsystemoperatorstoprocureflexibilityservices,includingcongestionmanagementintheirareas,inordertoimproveefficienciesintheoperationanddevelopmentofthedistributionsystem.Inparticular,theregulatoryframeworkshallensurethatdistributionsystemoperatorsareabletoprocuresuchservicesfromprovidersofdistributedgeneration,demandresponseorenergystorageandshallpromotetheuptakeofenergyefficiencymeasures,wheresuchservicescost-effectivelyalleviatetheneedtoupgradeorreplaceelectricitycapacityandsupporttheefficientandsecureoperationofthedistributionsystem.”11ThoughGermanyhasyettofullyimplementtheEUmeasures,thenewgovernmenthaspublishednewgoalsfortheelectricitygenerationsector,settingtargetsfor80%renewableenergyby2030andclimateneutralityassoonascoalcapacityisfullyretired,by2038orideallyby2030.Distributedgenerationandflexibilitywillplayanimportantroleinthiscarbon-neutralelectricitysystem.Thecoalitionagreementofthenewgovernmentannouncesplanstoimproveregulationsforenergycommunitiesanddistributedgenerationandintroducenewmandates.Theseincludetheobligationtoinstallrooftopsolaronnewbuildings.TheamendmentoftherenewableenergylawsetsnewexpansiontargetsforsolarPV,andcontainsimprovementsofregulationsforenergysharing.Thecoalitionagreementalsomentionsinstrumentsdesignedtoimprovestorageandloadmanagement,thoughitdoesnotoutlinespecificmeasures:“Inordertoincentivizetherapidexpansionofgenerationcapacity,wewillevaluateexistinginstrumentsandexaminecompetitiveandtechnology-neutralcapacitymechanismsandflexibilities.Theseincluderenewableenergy,highlyefficientgas-firedpowerplantswithcombinedheatandpowergenerationaspartofthecorrespondingfurtherdevelopmentofthelaw,aninnovationprogram,storage,energyefficiencymeasures,andloadmanagement.”12Thus,Germanyiscurrentlyscalingupdistributedrenewableenergy,energystorage,andelectricvehicleswhilepolicymakersareattheearlystageofexploringregulatoryoptionstoensuredistributedenergyplaysalargerroleintheenergysystem.Asthefollowingchapterwilldiscuss,thisposeschallengesforthegrid,andrequiresadditionalpoliciestosupportflexibility.9Existingelectricitysystemsaredesignedtoaccommodate20th-centurypowersystemsbasedonone-directionalpowerflowsfromconventional,centralized,large-scaleelectricityproductionfacilitiestoendconsumers.Transmissiongridoperatorsfocusedonpreventingfailuresatlargegenerationplantsortransmissionlines,whiledistributiongridoperatorsfocusedonplanningandoperatinglocalgridstoaccommodatepeakloads.Inthe21stcentury,thegridfacesnewchallenges,especiallytheneedtointegratehighsharesofcentralanddecentralizedvariablerenewableenergysourcesandelectrificationofheating,mobility,andindustry.Ensuringreliability,stability,andsafeoperationofelectricitysystemsrequiresnewwaysofthinkingtoadapttoandovercomethesechallenges.2.1ChallengesindistributiongridsGrowingsharesofvariablerenewableenergy(VRE)canposechallengestothegrid,especiallyatthedistributiongridlevel.Residualload,definedaselectricityconsumptionminusVREgeneration,candecreasetoalmostzeroandthenincreasesignificantlywithinashortperiodofeitherdaysorhours,asshowninthefigurebelow.13InthecaseofsolarPV,atthedistributionlevelspikesinoutputcanoccurwithinseconds.Figure3FlexibilityrequirementswithhighsharesofRE–exampleloadcurvesfortwoweeksduringthewinterinGermanyLoadResidualload40%RESSource:AgoraEnergiewende,June20222TechnicalchallengesofelectricitysystemswithhighshareofvariablerenewablesAhighshareofvariablerenewableenergyintheenergymixleadstoconsiderablechallengesinelectricitysystems,inparticularfordistributedrenewableenergyconnectedtothedistributionnetwork.Challengesincludethepotentialviolationofthermallimitsofnetworkdevicesduringperiodsofhighfeed-inaswellasvoltageproblemsandback-feedissues.DistributionnetworkoperatorsinGermanyandothercountrieshaveassumednewresponsibilitiestotackletheseproblems.Onthesystemlevel,highsharesofrenewableenergyfeed-inalsocontributetotheneedfornetworkexpansion.Thesystemalsoneedsnewsourcesofancillaryservicesasconventionalpowergenerationassetsphaseout.10Ontheconsumerside,furtherelectrificationofend-usedevicescancausetemporaryspikesofgridpowerdemandandthusputpressureonthegrid.14Thedistributiongridcanfaceseveraltechnicalissuesposingathreattosupplyreliability,stability,andsafeoperation.Whenunexpectedpowerflowsexceedtheoperationallimitsforpowersystemequipmentorviolatevoltagethresholds,seriousdamageoroutagescanoccur.15Thefirstissuerelatestoathermaloverloadviaheatingbecauseofpowerinthenetworkexceedingthepowerratingsofthesystemcomponents.16Theissuecanaffectgridcablesortransformers,whichareoneofthemostexpensivecomponentsofthepowersystem.Anysevereoverloadingcancausedamageoranoutageifthegridoperatordoesnotorcannotrespondimmediately.Thesecondissuerelatestochangesinvoltage,whichcouldleadtoasituationofvoltagedisturbanceorevenavoltageviolation.Voltagedisturbancescanoccuraslong-termandshort-termvoltagevariations,voltageflickers,andharmonicdistortions.Duringavoltageviolation,thesystemencountersvoltageoutsideofthestandardrangespecifiedbytheregulatoryauthorities.Disturbancescanleadtowearandtearincustomerelectricalappliancesandgridequipment.Thethirdissueisbackfeedproblems.Backfeedisdefinedaspowerflowscontrarytosystemdesign.Bidirectionalpowerflowscreatedbydistributedgeneratorscancauselocalvoltageissues.Indistributiongridsnotdesignedforbidirectionalpowerflows,consumer-owneddistributedPVsystemscouldresultindamagetothedistributionsystemfrombackfeed.17Overtime,growingdistributedenergyin-feedwillincreasecongestioninthedistributiongrid,andrequireactivemanagement,costlyredispatch,andnewgridinvestments.18Today,ontheoperationalside,thedistributionnetworkoperator(DNO)canuseloadsheddingandcurtailmentofVREtosolvenetworkcongestionproblems,albeitwithacosttoincreasedgenerationtoreplacethecurtailedrenewableoutput.ExtendingandexpandingtheconventionaldistributiongridcanalsoaccommodateincreasingVREin-feed.Decentralizedflexibilitycanhelpreduceoravoidthemajorcostsassociatedwiththechallengesdescribedabove.ThefutureelectricitymarketwillrequireadjustingtraditionaldistributiongridplanningandoperationandthereforerequiresDNOsplaynewroles.DNOseffectivelybecomedistributionsystemoperators(DSOs).BothloadsheddingandVREcurtailmentshouldremainanexception,andinvestmentsinexpandingtheconventionalgridshouldbeavoidediflesscostlyalternativesareavailable.DSOscoulddeepentheirroleasactivesystemoperators,inadditiontotheirroleasnetworkoperators.19Forinstance,theycouldprocureflexibilityservicesfromtheirnetworkusers,providereactivepowersupporttotransmissionsystemoperators(TSO),bycarryingoutmanagementoflocalcongestionandnon-frequencyancillaryservicessuchasvoltagecontrol,whileTSOstakeresponsibilitysolelyforfrequencyancillaryservices.20Furthermore,aDSOcanstillengageinloadsheddingandcurtailmentofVRE.However,theDSOshouldapplythemeasureasalastresort,becauseitwillinevitablyleadtoadistortionofthedeliveryforeseenunderthewholesalemarketoutcomes.Inanycase,anappropriateregulatoryframeworkisaprerequisite.ThefollowingfigurecomparestheDNOroleintraditionalpowersystemandaDSOwithinasystemdominatedbydistributedrenewables.11Figure4ThenewrolesofthedistributionsystemoperatorsSource:InternationalRenewableEnergyAgency(IRENA),2019ChallengesonthesystemlevelHighsharesofdecentralizedVREonthelocallevelhaveimplicationsnotonlyforthedistributiongridbutalsoonsystemlevel.Becausetheiroutputcoincideswiththatofcentralwindandsolarplantsconnectedtothehigh-voltagetransmissiongrid,distributedwindandsolaroutputaggravatesexistingcongestionproblemsonthetransmissiongrid.Itmeansthattransmissiongridoperations,includingcross-borderpowerexchanges,facenewcosts.InGermany,policymakersandTSOshaveworkedforyearstoexpandthepowergridtoreducegridcongestion,butgridexpansionhaslaggedtheexpansionofwindandsolarcapacity.Germany’stransmissionplanaimstobetterconnectregionswithconcentratedrenewablesources,especiallywindintheNorth,withregionsofloadcenterssuchastheindustrialclustersinthemiddleandonthesouthofthecountry.In2015,GermanyamendedtheLawontheExpansionofPowerLines,settingaregulatoryframeworkforplannedhigh-voltagetransmissionlinesfromNortherntoSouthernGermany,namelytheSuedLinkandSuedOstLink.21Evenwhenthenewlinesbeginoperation,Germany’stransmissiongridbuild-outisunlikelytokeeppacewithfuturewindandsolaradditions.Therefore,transmissionexpansioncannotservetheprimarysolutiontoensuringsystemstabilitywithhighsharesofwindandsolar.Tosolvenetworkcongestiononthesystemlevel,redispatchbasedonflexiblecapacity—mainlygas-firedplants—playsanincreasinglyimportantrole.ThetermredispatchreferstothefollowingpracticecommoninGermanyanditsEUneighborcountries:Iftheevaluationoftheschedule(ordispatch)resultingfrommarkettransactionbytheTSOshowsthatbottlenecksareimminentorthatthereareshort-termoverloads,theTSOordersthatthegeneratorschangetheirschedules(redispatch)toovercomethenetworkcongestion.Theaffectedgeneratorswillberemuneratedforthisserviceunderanadministrativescheme.12ThelatestelectricitymarketreformsinitiatedbytheGermanfederalgovernmenthaveexpandedthescopeofassetsallowedtoofferancillaryservices,includingbalancingservices.TheGermanyBundestagenactedthereforms,knownasElectricityMarket2.0,includingameasuretopromotetheenergytransitionintheelectricitysector.Thegovernment’saimwastostrengthencompetitionbetweengeneration,demand,andstoragewhileimprovingtheincentivesforflexibility.Germanyalsointroducedsafeguardmechanisms,includingthenetworkreserveandcapacityreserve.ThesereservesrefertoadditionalcapacityoutsidethemarketavailabletotheTSOwhenorifthewholesaleorcontrolenergymarketsareunabletosupplysufficientelectricitytomeettheentiredemand.Priorto2022,mostobserversdidnotexpectGermanytoactivatethecapacityreserve.However,Europe’sgassupplycrisisnecessitateditsactivationtoreplacegasgenerationandsavescarcefuelsuppliesfortheheatingsector.AlthoughavailableflexibilityintheGermanelectricitysystemissufficienttoguaranteesystemstabilitytoday,preservingsystemstabilitywillbecomechallenginginthemid-tolong-termfutureduetothedecreasingcapacityofflexibleconventionalgenerationassetsresultingfromtheplannedphaseoutofnuclearandcoalpower.Therefore,thecurrentgovernmenthasannouncedplansforfurtherelectricitymarketreformtomakemoreflexibilitysourcesavailable.ThereformswilllikelygivemoreweighttotheroleofdecentralizedflexibilityassetssuchasDSMandbatteries.133.1FlexibilityasaremedyforproblemsonthedistributionandsystemlevelAcombinationofconventionalandsmartgridsolutionscanhelpaddressthechallengesofintegratingdistributedandcentralrenewablessuchaswindandsolar.Conventionalsolutionsincludetheconstructionofnewinfrastructuresuchastransmissionlinesandtransformers,extensionofexistinginfrastructureviaadditionalcablesandreplacementoftransformers,andoptimizinggeographicallocationofVREadditionsbasedonavailablenetworkcapacity.Smartgridsolutionsbuildontheuseofflexibilityinthesystem.Theseallowforimprovementsoftheoperationalefficiencyofthegrid,managementofVREfeed-in,andloadcontrols.Basedoninformationandcontrolsoftware,thegridoperatorcanforecastanddetectnetworkcongestionproblems,includingtheviolationofthermallimits,backfeedissues,andvoltageproblems.Thegridoperatorcanthenactivatetechnicalremediesinthesystem.Asmentionedpreviously,therearetwomajorflexibilitytechnologyoptions:storageandDSM.Electricitystoragetodaycanbeprovidedbypumpedhydroandbatteries,andinthefuturebyhydrogen.Demandsidemanagement(DSM)isprovidedtodaybyappliancesinindustryandprospectivelybysmallbusinessesandhouseholds.Aprerequisitefortheuseofflexibilitybythenetworkoperatoristheavailabilityofsmartgridtechnologies.EnablingandundertakingtheinvestmentsintothesetechnologiesarekeychallengesoftheenergytransitioninGermanyandEurope.Currently,boththeEuropeanCommissionandtheGermangridregulator(BNetzA)aredevelopingregulatorymandatesandwiththeaimofenhancingthesmartgridcapabilitiesofEUandGermannetworks.TheuseofflexibilityprovidedbystorageandDRrequiresinformation,communication,andcontroltechnologyinthegrid,availabletothegridoperator,commonlycalledsmartgridtechnologies.Smartgridtechnologyincludesthefollowingbasicelements:CommunicationsuchasmobilecommunicationsnetworksSmartmetersenablingbi-directionalcommunicationCommunicationsoftwareregulatingdataexchangebetweendevicesandsystemsControlelementsinallDSMdevicesOnlywithsmartgridtechnologyintegratedintothepowersystematalllevelscandecentralizedflexibilityplayafullroleinintegratingdecentralizedrenewables.Inaddition,smartgridtechnologyhasbenefitsfordevelopingmorefunctionalandtransparentelectricpowermarketsandenablingcustomerstomonitorandreducetheirownconsumptionandshiftconsumptiontoperiodswhenmorecleanenergyisavailable.3.2FlexibilityinthedistributiongridEurope’selectricityindustryoperateswithinadecentralized,liberalizedmarketparadigm,governedbyseveralEUdirectivesandregulations.Thisparadigmmandatescompetitivemarketsforthegenerationandtradeofelectricity,whiletransmissionanddistributionremainregulatedunderadministrativeentitiesthatcontroltransmissionanddistributiontariffs.Generationandelectricitytradingarelegallyseparatedfromtransmissionanddistribution,aseparationknownasunbundling.Unbundlinghasconsequencesfortheuseofflexibility:Networkoperatorsfacestrictlimitationsontheownershipandoperationofelectricitystorageandtheuseofdemandresponse.Sincegridoperators,includingbothTSOsandDSOs,cannotbuyorsellelectricity,this3FlexibilityforgridintegrationofdistributedrenewablesFortwodecades,electricitygridoperatorsintheGermanyandelsewherehavelearnedhowtocopewiththeincreasingshareofvariablerenewableenergyintheenergymix.Whilethebasicsetupofregulationandgridmanagementintheliberalizedmarketsystemprovidedaworkableframeworkintheearlystageofrenewableexpansion,highersharesofrenewableenergywillincreasinglyentailfundamentalregulatorychanges.Theseinvolvesmartgridtechnologiesandtheactivationofflexibility:Withsmartgridtechnologies,DNOscanuseofstorageandloadcontroltomanagecongestionandavoidcostlyinvestments,forthebenefitofallcustomers.14meanstheycannotfullyoperateabatteryinthesystem,suchasforloadshiftingorstoringsolarPVgenerationexceedingtheloadatagivenpointintime.Instead,networkoperatorsprocureancillaryservicesandreservesfrommarketparticipantstoensurenetworkstability,whichisthelegaldutyofTSOsandDSOs.Moreover,gridoperatorsareallowedtotechnicallyinterveneandcontrolfeed-inandfeed-outintothegridinanemergency,providedallotheroptionshavebeenexhausted.Germanyhasawell-developedancillaryservicesmarket.TSOshaveasetofestablishedcompetitiveprocurementproceduresforseveralstandardsituationsthegridmayencounter.Themostimportantinstrumentsarebalancingservices,whichencompassprimary,secondary,andtertiarycontrolreserves.Controlreservesaredistinguishedbytheiractivationtimesandavailability.Thesearerequiredtoguaranteefrequencystabilityincaseswheremarketparticipantsconnectedtothegriddeviatefromtheirscheduledgriduse,thusendangeringnetworkstability.Otherancillaryservicesonthesystemlevelincludespinningreserves,voltagesupport,andblack-startcapacity.TSOshaveseveralwaystomonitorandmanagetheirnetworks,inlinewiththeneedsofthetraditionalelectricitysupplymodelwheregenerationassetsareconnectedonthetransmissiongridlevelanddistributiongridsaredesignedtodistributeelectricitytoconsumersconnectedonlowervoltagelevels.Today,thousandsofsmall,distributedgenerationinstallationsareconnectedtoGermany’sdistributiongrid,whichchangestheroleofthegridoperator.Asexplainedbefore,theoperatorofdistributionnetworkshouldinthefuturebecalleddistributionsystemoperator(DSO),atermthatseemsbettersuitedfortheroleneededintoday’sdistributiongrid.Increasingly,DSOsmustactivelymanageloadandfeed-intostabilizethegrid.Existingsmartgridtechnologies,suchascontroldevicesforrenewableenergyinstallationsaremandatoryinGermanytoday.Theintroductionofsmartmetersinprosumerhouseholdswillexpandthesepossibilities.Apartfromthetechnologicalupgradesneededfortheoperationofasmartgrid,thesystemneedsanewregulatoryframeworktoenablethedistributionsystemoperatortolegallyprocureanduseflexibilityinthedistributiongrid.Severaldifferentmodelsareunderdiscussionorbeingpilotedtoday,andthesemodelsdifferinseveralrespects.Forexample,differentmodelsfeaturedifferentscopesandtimingofDSOcontrolofdistributedgenerationorstorageassets,anddifferentremunerationschemes.Figure5AlternativegovernancemodelsforflexibilityuseSource:Dena,2022Underadministrativeremuneration,aregulationdefinesthescopeofflexibilityandtheregulatorsetstheapplicabletariffforthoseprovidingflexibility.Thescopeofflexibilityusecanvary.Atoneextreme,underemergencyconditions,thenetworkoperatormayexertfullcontrolovertheavailableflexibilitysuchasstorageandDSM.AnotheradministrativeschemeinvolvesaquotasystemthatlimitstheDSO’scontrolrightstocertainperiodsandcapacity,suchas20%ofaparticipant’sbatterystoragecapacity.CompetitiveprocurementofflexibilityisanalternativewheretheDSOdefinesthespecificscopeoftherequiredflexibility—suchasanancillaryservice—andsetsupatenderwithtechnicalpre-qualifications.BothstorageandDSMoperatorscanthenbidandselltheirtechnical15capability.Therearedifferentapproacheswithrespecttothefrequencyanddurationoftheprocurement:Undermid-tolong-termcontracts,theDSOpurchaseswell-definedcontrolrightsofaflexibilityassetforseveralweeksormonths.Incontrast,inashort-termflexibilitymarket,flexibilityistradedonplatformwithdailyauctions.Germanlegislationtodayallowsforsomeversionsoftheformermodel:UndertheEnergyMarketLaw,specificcontractsbetweentheDNOandenergyusersallowforindividual,flexiblegridfeestoremuneratetheprovisionofflexibility.Thelattermodel,aflexibilitymarketplatform,hasbeenintenselystudiedintheGermanfederalgovernment’sSINTEGresearchprogram,thatincludedboththeoreticalstudiesandpilotprojectsinvestigatingdifferentformsofflexibilitymarkets.Asoftoday,however,theGermanlegislaturehasyettointroducethelegalframeworkforsuchanonymousplatformsforthetradingofflexibility,duetoongoingdebateoverthepotentialmarketabusebyrogueplayersintheseplatforms.3.3AggregationofdecentralizedflexibilityBecauseofthelowcompensationforfeedingresidentialsolarPVoutputintothegrid,GermanhouseholdswithPVhaveincreasinglyinstalledhomebatteriestoraisetheproportionofself-consumption.Whilethishassomeadvantagesfromthegrid’sperspective,itisnotideal.Customer-sitedbatteriesdeployedpurelyforself-consumptioncanleadtoirregularandunpredictablein-feeds,suchaswhenahouseholdhasnoelectricityloadoncertaindaysorhours.Inaddition,distributedenergyownershavebarelybeguntoparticipateindemandresponseprograms,partlyduetothelackofastandardpaymentframeworkfromtheDSOs.Inaddition,Germany’saggregatormarketisstillinitsinfancy,evencomparedtoneighboringcountriessuchasFranceandBelgium.Thetermaggregatorreferstoamarketrolethatengagesinacontractualrelationshipwithsmallprovidersofflexibilitytoharnesstheirpotentialinthesubmarketsoftheelectricitysystem,sharingthegainsoftrade.Directparticipationinwholesaleandancillaryservicemarketsisunrealisticforsmallconsumers.Thetransactioncost,includingtimespentlearningaboutandmanagingtheenergyflowsfromsmallsystems,byfaroutweighspotentialgains.BybundlingthepotentialofhundredsorthousandsofprosumerswithbatteriesandsmallbusinesseswithDRpotential,theaggregatorenablestheirparticipationinelectricitywholesaleandancillaryservicemarkets,inexchangeforaflatorvariablepaymentforparticipation.Inprinciple,anenergysupplierormarketparticipantwithmanycustomerscanfulfillthisrole.Giventhesluggishprogressonaggregators,theEUin2019decidedtoestablishtheroleofanindependentaggregator.Figure6AlternativemodelsforaggregationofdemandresponseSource:Dena,202216Directive2019/944definestheroleofaggregators.Article17clarifiesthataggregatorcanenterthemarketwithoutconsentfromothermarketparticipants,aggregatorscannotberequiredtopaycompensationtosuppliersorgenerators,andthatgridandmarketoperatorsmustprovideaggregatorsaccesstotherequirednetworkdata.Thisprovisionaimsatavoidingobstructionbyenergysuppliersthatmightprefertoavoidallowingtheirconsumerstoparticipateinaggregationcontracts.However,thedirectivealsorequiresaggregatorstonotifysuppliersabouttheaggregationarrangementsothatthesuppliercanensurereliableelectricitydelivery.Theindependentaggregatormustalsoassumebalancingresponsibility,justlikeothermarketparticipants,toavoiddangerstosystemstability.Thesecouldresultfromunforeseenoruncoordinatedactivationofloadcontrolsthatcouldcausedistortionsintheloadforecastgiventoothermarketparticipants.NEMO.spot,aGermanstartup,isanexampleofanindependentaggregatormakingdecentralizedflexibilityavailabletothemarket.22Theplatformengageswithprosumersandsuppliersofferingofflexibility,andwithnetworkoperatorsfortheuseofflexibility.Inthisway,allpartiescanadjusttheirplanningandoperationaccordinglyandflexibilitycontributespositivelytonetworkstability.174.1User-sitedbatteryelectricitystorageUser-sitedbatterieshavetwooperationalmethodsthathavedifferentadvantagesanddisadvantagesforthecustomerandthepowersystem.Batteriescaneitheroperateintheelectricitymarket—fortheGermancase,typicallybymaximizingself-consumption—ortheycanprovidegridsupport.Thetwomodesofoperationmayverywellbeinconsistentorevenmutuallyexclusive,aspricesignalsdonotreflectthecurrentsituationofthedistributionortransmissionsgrids.Thefiguresonthefollowingpagehighlighttheproblem.Abatteryownedandoperatedbyaprosumerwilltypicallybeusedtoincreaseself-consumptionfromasolarPVinstallation.Mostconsumershaveinsufficientbatterycapacitytoabsorballoutputfromthesolarsystem.Onthesunniestdays,iftheprosumerchargesanunder-sizedbatteryuntilitisfull,andifsolarproductioncontinuesoncethebatteryhasbeenfilled,thisresultsinasuddenincreaseinfeed-in.Inthesummer,thiscouldhaveanespeciallydetrimentaleffectgiventhatmostsolarPVinstallationsinagivenregionarelikelytoreachtheirpeakoutputatasimilartime.Incontrast,ifusershaveanincentivetooperatebatteriesinapeak-shavingmode,thisavoidsanysuddenspikesinfeed-inwhenthebatteryisfull,andreducesthemaximumfeed-in.Thisnotonlyalleviatesimmediategridproblems,butcanreducetheoverallneedforgridupgradeswhenscaledupacrossmanyprosumerswithintheregion.Figure7Prosumerbatteryusedforincreaseofself-consumptionSource:adaptedfromFraunhoferISE:AktuelleFaktenzurPhotovoltaik(S.70)01234567890:151:152:153:154:155:156:157:158:159:1510:1511:1512:1513:1514:1515:1516:1517:1518:1519:1520:1521:1522:1523:15directconsumptionfeed-instoragechargestoragedischargeload4TheuseofdecentralizedflexibilityinGermandistributionnetworksInprinciple,decentralizedflexibilitytoolsofferavarietyofservicestothegrid.Theuseandadvantagesdifferdependingonthetechnologydeployed.Today,Germanyhasanincreasingnumberofflexibilityassets,includingbatteriesandDSM,butlacksacomprehensivemarketframeworkforflexibility.Instead,electricitystorageandDSMhaveseparaterules.Electricitystoragefacessomeregulatoryhurdlesbeforeitcanplayafullrole—issuesthenewGermangovernmentplanstoaddress.AsforDSM,gridoperatorshavevariousdirectloadcontrolmethods,andtherearesomenewmarketentrantsintotheDSMspace,butdeploymentislow.18Figure8Grid-friendlyuseofprosumerbatterySource:adaptedfromFraunhoferISE:AktuelleFaktenzurPhotovoltaik(S.70)Thisexampleshowsthatthetechnicalavailabilityofstorageinthesystemdoesnotitselfresolvegridcongestion,andmayevenexacerbatethem.Regulatoryandmarketincentivescanincentivizeormandategrid-friendlybatteryoperation.4.1.1StoragetechnologiesandservicesAvarietyofconventionalelectricitystoragetechnologiesisavailableonthemarket,includeconventionaltechnologiessuchaspumpedhydrostorageandbatterystorage.Eachstoragetechnologyhasitsuniqueadvantagesanddisadvantages.Themostcommontypeofsmall-scaleelectricitystoragearebatteries,whichtypicallyofferstorageforsecondsuptodays.Conventionalbatteriesincludelithiumionbatteries,redoxflowbatteries,lead-acidbatteries,andsodium-sulfurbatteries.Thosetypesofbatteriesarecommerciallyavailable.redoxflowbatteries,lead-acidbatteries,andsodium-sulfurbatteries.Thesetypesofbatteriesarecommerciallyavailabletoday.Batteriesofferhighround-tripefficiencybutpartlyhavetheExample:ProsumerhydrogenstationLAVOintroducedintegratedhybridhydrogenbatterieswhichcombinerooftopsolarandgreenhydrogen.Thefuelcellisusedtocoverenergystoredinthehydrogenbackintoelectricalenergy.Thestorageisabletocoveranaveragehouseholdfortwodays.01234567890:151:152:153:154:155:156:157:158:159:1510:1511:1512:1513:1514:1515:1516:1517:1518:1519:1520:1521:1522:1523:15directconsumptionfeed-instoragechargestoragedischargeload19disadvantageofsecurityrisksduetohighoperatingtemperatures.Double-layercapacitorsareanothertypeofconventional,commercially-available,andwidelyusedelectricitystoragetechnology.Whenthecapacitorischarged,apositivechargeformsononeplateandanegativechargeontheother,creatinganelectricfield.Double-layercapacitorsareanexampleofmicro-storage,applicableforsecondsandminutes.Theyofferhighstabilityandperformance,fastcharginganddischarging,aswellasalongoperationallifetime.Small-scalehydrogenstorageisaninnovativestoragesolution,whichisalsoapplicableondecentralizedlevel.Itoffersalonglifetimeandiscommerciallyavailableforresidentialapplications.Hydrogenofferslowerround-tripefficiency,butlongerstoragetimes.Dependingonitstype,electricitystoragecanofferarangeofservicestothegrid,includingancillaryservices,distributioninfrastructureservices,bulkenergyservices,customerenergymanagementservices,andoff-gridserviceslikeinsolarhomesystemsandmini-grids.Someofthosedirectlyservetheintegrationofvariablerenewableenergy.Technically,batteriesareavailabletoday,theirdeploymentvariesdependingoncostandregulatoryconsiderations.Table1Overviewoverservicesprovidedbybatteries4.1.2RegulatoryissuesElectricitystoragecurrentlyfacesseveralregulatoryissuesaffectingtheirprofitability.Solvingtheseissueswillrequireacombinationofincrementalregulatoryimprovementsandnew,comprehensiveregulatoryframeworks,asdiscussedinsection3.Networktariffs:Afteryearsofdebate,Germanyrecentlyexemptedelectricitystoragefromnetworktariffsforchargingiftheelectricityisfedbackintothegrid.Abroaderdiscussionfocussesonhowtoincentivizegrid-friendlydeploymentofstoragewithdynamicnetworktariffs.Storagesitedwithutility-scalewindandsolar:Whenstorageiscombinationwithavariablerenewableenergyinstallation,anotherregulatoryissuearisesconcerningpaymentoftariffs.Ifthestorageislocatedbehindthemeter,andtherenewableoutputnotseparatelymetered,thebatterymustchargewithrenewableenergyonly.Ifstoragewerechargedwithelectricityfromthepublicgrid,itisnolongerdefinedasarenewableproducer,andwouldloseanytitletorenewablesupportssuchasrenewablefeed-intariffs,renewablePPAs,orrenewableguaranteeoforigin(GO).Inotherwords,generation-sitedstoragecannotofferflexibilitysupporttothegridwithouttheinstallationlosingeconomicbenefits.ThisactsasadisincentiveforofferingflexibilitytotheDSOortoTSOevenwhenitwouldbereadilyavailableatlowcost,suchasprovidingancillaryservices.Inturn,thisalsoactsasadisincentiveforcombiningrenewablegenerationwithstorage.Prosumerbatteries:Asexplainedintheintroductionofthissection,prosumersthatownelectricitystoragetypicallyseektomaximizeself-consumption.Undernet-billingschemes,excesselectricityproductionisfedintothegrid,forwhichprosumersreceiveonlymodestTypeScaleApplicationtimeServiceprovidedBatterySizerangesfrommicro-storageuptomid-scalestorage(<100kW-100MW)Applicableforseconds,minutes,hours,anddaysBulkenergyservices,Ancillaryservices(viaaggregation),Distributioninfrastructureservices,Customerenergymanagementservices,Off-gridFlywheelSmallscalestorage(1-10MW)Applicableforseconds/minutesDistributioninfrastructureservices,Customerenergymanagementservices,Ancillaryservices(viaaggregation)CapacitorMicro-storage(<100kW)Applicableforseconds/minutesDistributioninfrastructureservices,Customerenergymanagementservices20paymentsfarbelowtheirownelectricitysupplytariff.GivenGermany’shighresidentialandcommercialelectricityprices,prosumerscanpaybackstorageinvestmentsinafewyearsbysavingonelectricitypurchasesfromtheirsupplier.However,thedisconnectbetweenhighpowerpricesandlowpaymentforfeed-intothegrideffectivelydetersprosumersfromofferingflexibilityandleadstotheproblemdescribedinthebeginningofthissection.Clearly,regulatoryincentivesarerequiredtoencourageaggregationorremunerationbytheDSO.Today,somerestrictionstofeed-inareincludedinlegislation.Additionally,Germanyhasapublicsupportprogram(KfW-Förderprogramm)whichcoverspartoftheinvestmentcostofbatterystorageforprosumerswithPV,andthisprogramlimitsgridconnectioncapacityto50%ofthepeakcapacityofthesolarPVinstallation.Amoresophisticatedregulationcouldenhancetheusefulnessofbatteriesforthegrid.Intheabsenceofacomprehensiveflexibilitymarket,thesecouldincludedynamicnetworktariffsorindividualcontractsbetweentheDNOandtheprosumer.4.2Demandsidemanagement(DSM)DeploymentofdemandsidemanagementinGermanyandinEuropehassteadilygainedattentioninrecentyears.WhileEuropeancountrieshavealreadyseveralDSMmeasuresandaredevelopingandpilotingothers,DSMmakesaonlyminorcontributiontoloadflexibilitytoday.GrowthinDSMdeploymentwillentailvarioustechnical,market,andregulatoryconditionsthatfutureelectricitymarketreformshouldprovide.Atalocallevel,foranenergysystemconnectedtoadistributionelectricitygrid,DSMmeasuresutilisationisinanearlystageofdevelopmentandhassignificantuntappedpotential.Futureflexibilitymarketscouldofferanefficientwaytoutilisethispotential.Thissectiongivesandoverviewoftechnologyoptions,usecases,regulatoryissuesandpracticalexamplesofDSMdeploymentwithafocusonlocaldistributiongrids.Figure9GridandMarketapplicationsforDSMSource:Dena,2018DSMoffersbenefitsbothfromagridandamarketperspective.DSMmeasurescanhelptostabilizethegridandreduceoperationalandinvestmentcostsforthegridoperator.DSMcanalsohelpconsumersoptimizetheirconsumptionbehaviourandachievefinancialbenefits.DSMmeasuresincludedifferentwaysofactiveorautomatedelectricloadmanagement,eitherinresponsetoanexternalpricesignalorunderacontractuallyagreedload-controlsignal.23Forbothcases,DSMcaninvolveasingleconsumer,anenergycommunity,oralargenumberofconsumersaggregatedbyathirdparty.SomeindustrialconsumersorlargercommercialconsumersmayhavesufficientincentiveandsophisticationtoparticipateinDSMontheirown.Forsmallerconsumers,aggregationmakesmoresense.21Table2ApplicationareasandendusesectorssuitedforDSM(ownrepresentationbasedondena202124andFfe202125)IndustryServiceandTradeDomesticappliancePaperAir-conditionFreezer/fridgeChemicalsAirpressure/pumps/ventilationWashingmachine/dryerMetalProcesscooling:cooling/fridgesAir-conditionerStone/SoilProcessheating:heating/hotwater/ovenHotwater(electric)GlassHeatingCirculationheatpump(heat)MachineconstructionDatacentresElectricvehiclechargingFormanyyears,DSOload-controlagreementshaveallowedsmallconsumersinGermanytocontractwiththeDSOtoremotelymanagetheelectricityconsumptionofoneormoreofthecustomer’selectricaldevices,inexchangeforadiscountongridcharges.Dataonloadcontrolagreementsin2021showthataround83%ofDSOsinGermanyareusingthisDSMinstrumenttomanage1.8millionend-userdevices.Inexchange,DSOshavegrantedparticipantsanaverage57%reductioninthegridcharges.26Nightheatersaccountfortwo-thirdofload-controlagreements,followedbyheatpumps.Todate,DSOshavenotwidelyappliedload-controlagreementstoEVcharging,customer-sitedenergystorage,airconditioning,orotherlargedevices.Stand-alonehomecoolingisuncommoninGermanytoday,thoughthiswilllikelyshiftasaresultofclimatechangeandwiderheatpumpadoption.Asforthehomebatterystoragemarket,whereconsumerstypicallypairbatterieswithsolarPVforself-consumption,theabsenceofaggregationormarketincentiveshaspreventedparticipationinload-controlservices.Thiscontrastswithothercountries,whereutilitieshaveofferedincentivesforpurchaseofhomebatteriesinexchangeforload-control.DSMPlatform-AirportStuttgart:apilotprojectoftheairportoperatorCONCEPT:aresearchprojectDSMreal-timedataplatformBWforanintegratedenergysystemsolutionforStuttgartAirport.Itaimstoreducepeakloadsandadditionallymarketgenerationcapacityasbalancingenergytoensurethestabilityofthepowergrid.Theprojectincludesablockheatingstation,emergencypowergeneratorandInterruptableloads(coolingsystemandventilationsystem).Interruptibleloadsaremonetisedbysellingacontrolpowerbythevirtualpowerplantfromadistributionsystemoperator.Theprojectisapartofalargerresearchplatforminwhichdenaparticipates:DemandSideManagementinBaden-Württemberg(moreinfo:https://www.dena.de/en/topics-projects/projects/energy-systems/demand-side-management-in-baden-wuerttemberg/)HIGHLIGHT:Reducingcostoftheairportenergyoperationandenhancingsecurityofsupply.22Figure10ApplicationofloadcontrolagreementsbyDSOsinGermanyin2021bysharesofsmallconsumerdevicesSource:adjustedfromBNetzA2021Appropriateload-controltechnologyisaprerequisiteforloadcontrol.InGermany,suchtechnologiesincludesimpletimerswitcheswithaprogrammabletimepatternforloadcontrol,ripplecontrolforcarryingoutloadcontrolthroughone-directionalcommunicationviagridortelecontrol,andmoresophisticatedbi-directionalcommunicationforloadcontrolviatelecommunicationnetworks.Incasetheofnightheatersandheatpumps,onaverage60%ofloadcontrolemploysripplecontroltechnology,onethirdthroughtimer-switchsolution,whilejust1%usesmoreadvancebi-directionaltechnologyApartfromloadcontrol,moreadvancedDSMsolutionsarebeingtestedonalocallevel.Severalpilotprojectareunderway,andtheyhavealreadydemonstratedtechnicalandcommercialviability.Applicationareasandusecasesincludeintegratedenergysystemsolutionsforconsumersoptimizingtheirenergyconsumptionandproduction(suchasforanairportorresidentialneighborhood)aswellasintelligentchargingandgridintegrationofelectriccarsandtheirbatteries.64%33%1%2%NightheatersHeatpumpsEVOther23Vehicle2Grid:apilotprojectofthetechnologycompanyMobilityHouseCONCEPT:anintelligentchargingandgridintegrationofelectriccarsandtheirbatteriesenablesvehicleownerstomakeeconomicsavingsonelectricitycosts(seetheinfographicoftheconceptbelow).Furthermore,vehiclescanbecomeprovidersofprimarycontrolpowerandhelptostabilisethepowergrid.Technicalpartofthesolutionisabidirectionalchargingcapacityandasmartchargingsoftwarethatadjuststhechargingplanofthevehicleaccordingtopricesignals.HIGHLIGHTS:electricitycostsoftheparticipatingvehiclesinapilotprojectwereapproximatelyhalved.InanotherpilotprojectitwasdemonstratedhowV2Gsolutioncancontributetostabilizethepowergridandownerscanbenefitfinanciallyaspartoftheenergymarket.TheprojectpromotorhasbeengrantedasupportforR&DofasmartchargingtechnologyintheframeworkofEUresearchandinnovationprogrammeHorizon2020(https://www.mobilityhouse.com/int_en/magazine/press-releases/eib-finances-the-mobility-house-under-innovfin-program.html).CHALLENGES:ItisessentialtoimplementthesecondeditionoftheISOstandard15118(regulatingcommunicationbetweenthechargingstationandthechargingmanagementdeviceinthevehicle).Inaddition,thegovernmentshouldeliminatedoubletaxationforthestorageofrenewableenergyandsimplifyregulatoryrequirementsforconnections.NPMV2Gfactsheet:https://www.plattform-zukunft-mobilitaet.de/wp-content/uploads/2020/10/201012_NPM_AG5_V2G_final.pdfQ:https://www.mobilityhouse.com/int_en/magazine/press-releases/vda-v2g-vision.htmlWindNODE-ENERGYCOMMUNITIES:CONCEPT:testingsolutionsforaligninggenerationandconsumptionofrenewableelectricityinresidentialquarters,bypracticalimplementationinahousingcooperativewithsixresidentialbuildingsand224apartmentsinBerlin,Germany.TechnicalconceptincludesalocalheatingnetworkwithamodulableCHPandadditionalpeakloadboilers.Thebuildingsareequippedwithsmartbuildingtechnologythatcontinuouslyadjustsheatgenerationtoheatdemand.Inaddition,power-to-heatfacilities,smartmeteringsystems,andconnectionstoenergyindustryplatformsareinstalledwhichenablesoptimisedconversionofasurpluspowerintoheatingenergy,orontheotherhandcansupportthegridbyselectivelyfeedingelectricityinthegrid.TheprojecthasbeensupportthroughthefundingprogramSchaufensterintelligenteEnergie-DigitaleAgendafürdieEnergiewende(SINTEG)fromtheGermanFederalMinistryforEconomicAffairsandEnergy(BMWi,nowBMWK).HIGHLIGHT:Thetechnologyachievedareductioninenergyconsumptionof24%comparedtobuildingsofthesametype.EnergymarketElectricitygridApartementmanagerBuildingmanagerQuartermanagerELECTRICITYHEATINFORMATION24Apartfromsuitabletechnicalandcommercialframeworks,widerdeploymentofDSMwillrequireamorecomprehensiveregulatoryframework.AnEUframeworkforenhancingthedeploymentofDSMbysmallconsumersisstillindevelopment,buttheEUhasalreadyidentifieditsstrategicgoalsandvariousconceptualdesigns.The2019cleanenergypackagerevisedelectricitymarketrulesandpavedthewaytowardsintegrationofrenewableenergyproduction.27Inthisregard,theprinciplestocreateanationallegalframeworkfordemandsideflexibility(DSF)—thetermusedinEUenergylegislationandusedhereasequivalentdemandsidemanagement(DSM)—andactiveparticipationofallenergyconsumershavebeensetbytheEUElectricityDirective.28TheregulationsandprinciplesdefineseveralspecifictopicsandaspectsimportantfortheDSM.29Regulatorsestablishedaprioritylistforthedevelopmentofharmonizedelectricityrulesby2023,andincludedrulesforDSF,aggregators,energystorage,andcurtailmentofdistributedenergyandrenewables.30TheEUAgencyfortheCooperationofEnergyRegulators(ACER)hasrecentlyannouncedthatitwillsubmitnon-bindingFrameworkGuidelinestotheEuropeanCommissionbyDecember2022.TheseFrameworkGuidelinesneedtosetoutclearandobjectiveprinciplesforthedevelopmentofanetworkcodeonDemandResponse.Thenewruleswillaimatenablingmarketaccessfordemandresponse,andfacilitatingthemarket-basedprocurementofservicesbydistributionandtransmissionsystemoperators.AggregationisoneoftheimportantnewrolesinthenewEUelectricitymarket.TheEUElectricityDirectivedefinesthisroleasentitiesthatengageinaggregationbycombiningmultiplecustomerloadsorgeneratedelectricityforsale,purchase,orauctioninanyelectricitymarket.Thisservicecouldbeprovidedbysuppliersorbyindependentaggregators.Lastly,theEURenewableEnergyDirectiveincludesprovisionsforrenewableenergycommunitiesandforcollectiveself-consumption(CSC),31wherelocally-producedelectricityissharedbetweenproducersandconsumersconnectedtothepublicdistributionnetwork,withinthesamegeographicalarea.32Initslatestmarketmonitoringreport,ACERnotesthatimplementationofrulesfordemandsideflexibilityandactiveparticipationofallenergyconsumerswasstillworkinprogressinmostmemberstatesattheendof2020.33OnlyGermany,Denmark,France,andHungaryhaddefinedthemainrolesandresponsibilitiesforaggregators,independentaggregators,activeconsumersandcitizenenergycommunities(CECs)—definedasvoluntarylegalnot-for-profitentitiesestablishedatalocallevelforthepurposeofenergygeneration,distribution,supply,consumption,aggregation,andstorage—intheirnationallegalframeworksandopenedoftheirmarketsandproductsforsystemoperatorstothesenewentrants.34AnoverviewandthesummaryofmainconceptsanddefinitionsimportantfortheEUrulesfortheDSMareshownintheinformationboxbelow.TheGermanElectricityMarket2.0,introducedin2016,fostersactiveroleofmarketparticipantsthroughDSMonacommercialbasis.35However,theframeworkforasignificantdeploymentofDSMbysmallconsumersisstillaworkinprogress.Smallconsumersconnectedtoalow-voltagegridhavearighttoparticipateinDSMthroughloadcontrolagreementswiththedistributionsystemoperators.Aproblemarisesfromthefactthatthegovernmenthasnotharmonizedimplementationofthissolutionwithotherregulatoryincentives,suchasindirectsubsidiestobatteries.TheEnergyIndustryLawstatesthattheFederalGovernmentisauthorizedtospecifybyordinanceaframeworkforthereductionofnetworkchargesandthecontractualarrangements,andtospecifycontrolactions.36Regulatorsarestilldebatingmorespecifictoharmoniseimplementationandtoallowparticipationofotherapplications,suchasEVchargingoruser-sitedbatteries.AnothercriticalissueforutilisationofuntappedpotentialsofdecentralizedDSMisaroll-outofsmartmetersandotherdigitaltechnologies.InGermany,policymakershavemadesomeprogressindesigningasmartmeterframework,buttherearestillhurdlestoovercome.TheLawontheDigitalisationoftheEnergyTransitionandtheITSecurityLawgovernthistopic.37Thelawstipulatesthatasof2017,theresponsiblemeteringpointoperatorshadtonotifytheFederalNetworkAgencyandbyJune2020,theoperatormusthaveinstalledsmartmetersonatleast10%ofthemeteringpoints.Aftercertificationofsmartmetergateway,inFebruary2020theFederalOfficeforInformationSecurity(BSI)gavethegreenlightforDSOstodeployintelligentmeteringsystems(iMsys),aninterfaceforconnectiontoacommunicationunit.Tofacilitatetheprocessofdigitalisationoftheenergygrid,in2019,theFederalMinistryforEconomicAffairsandEnergy(BMWi)andtheFederalOfficeforInformationSecuritypublishedtheStandardisationStrategyforCross-sectorDigitalisationoftheEnergyTransition,anoverallroadmapforenergydigitsation.38In2021,BMWiestablishedaGatewayStandardizationCommitteetodealwiththeinteroperabilitycertificationofsmartmetergateways.Fullimplementationofsmartmeteringtechnologywillallowfurtherdeploymentofdispatchableconsumptiondevices,suchasthermalenergystorageorelectricvehicles.255.1DistributedgenerationinChinaChina’srenewableenergysectorhasundergoneamajorshiftoverthepastfiveyears,addingbothlarge-scaleinstallationsanddistributedenergy.Priorto2019,thecountry’ssolarenergyexpansionconcentratedinthemoreremotewesternandnorthernprovinces,whichcontributedtohighratesofcurtailmenttopreservesystemstability.39Renewablecurtailmenthasfallentolowlevelsinmostprovincesduetoacombinationoffactors,includingadministrativeincentives,quotasforrenewableuptake,limitsonnewrenewablesinprovinceswithtransmissionbottlenecks,andinter-provincialtradingofrenewables.TheshareofdistributedsolarinChina’stotalsolarPVbegantosoarstartingfrom2016.Thereareseveralreasonsfortheshifttodistributedsolar.InMay2016,theNationalReformandDevelopmentCommissions(NDRC)issuednewguidelinesonthesizeandmanagementofdistributedsolarandremovedprovinciallimitstonewprojectapprovalsfordistributedsolar.DecliningcostshavealsomadedistributedsolarPVprojectsmoreattractivefordevelopers.Figure11China’sPVcapacitydevelopmentbycategorybetween2010and2021Source:NationalEnergyAdministration,20225ApplicationtoChinaChina’sdistributedandresidentialsolarPVisgrowingrapidly.Recentpolicieshaveprioritizedbuildingstoragetogetherwithutility-scalewindandsolarprojectsandallowingparticipationofdistributedPVandstorageinenergymarkets.Althoughthegridcanaccommodatesmall-scalesolarPVatlowlevelsofpenetration,athigherlevelsmoredemand-sideflexibilitywillhelpavoidcostlygridupgradesandcurtailment.GermanexperienceswithdistributedgenerationanddistributedflexibilityarelikelytobecomerelevantinChina.Decentralizedflexibilityhasalargepotentialtocontributetosystemandnetworkintegrationofdistributedgeneration.Asupportiveframeworkwouldbuildonpresenttime-of-usepricesandaframeworkofcontractsbetweenDNOsandflexibilityassetsownerstoharnesstheflexibilityforgridservices.0.93717284377130175204253306070140210280350GWCentralizedsolarPVDistributedsolarPVResidentialsolarPV26Figure12China’scumulativedistributedsolarPVcapacitybyprovincein2021Source:ChinaElectricityCouncil,2022DistributedsolarPVhasbeeninstalledmainlyineasternandsouthernChina,inregionswithreasonablyhighsolarresourcesandhighelectricitydemand.China’sstrictlanduseregulationshasmadedistributedsolarPVprojectsattractiveinmorepopulousregions.Inthe14thFive-YearPlan,Chinesepolicymakerssignaledthatthesystemwillsimultaneouslyexpandcentralanddistributedenergy,40callingforeasternprovincestodevelopdistributedenergytoincreaselocalenergyself-sufficiency.41Theplanalsostatesthatdistributedenergyandstorageshouldfullyparticipateinvariousmarkets.DistributedenergyinChinadifferssubstantiallyfromdistributedenergyinGermany,wheredistributedenergynormallyreferstoVREinstallationsconnectedtothedistributiongrid.InChina,thetermdistributedgenerationappliestomanylarge-scaleCHPplantsco-locatednearloads.42Furthermore,distributedsolartypicallyreferstomulti-MWground-mountedfacilitiesnearindustrialareas.43Rooftopsolarisgrowingasashareofnewinstallations,especiallysincetheadventofcounty-leveldistributedsolarpilots,butstillaccountsforarelativelysmallshareofChina’soverallsolarcapacity.IncontrasttoGermany,residentialsolarPVisanewphenomenoninChina.Nonetheless,eversince2017,thenumberofinstalledrooftopsystemshasincreasedrapidly.44Sofar,muchofthisgrowthisduetoChina’sPovertyAlleviationPVprogramme.Overthe13thFive-YearPlanperiod(2016–2020),theChinesegovernmentinvestedoverRMB20billioninthedeploymentofdistributedsolarinruralareas.45TheZeroEmissionVillageprojectinZhuangshangillustratesthisinitiative.46NEAreleasethelistofwhole-countypilotinSeptember2021.47Thelistincludes676countiesin32provinces.EligiblecountiesneedtohaveamplerooftopareaandincentivetoexploitrooftopstoinstallPVpanels.Thepolicyrequiresthatgovernmentbuildingsneedtohavemorethan50%ofthespaceavailabletoinstallPVpanels,whiletherequirementis40%forpublicbuildings,30%forfactories,and20%ofthetotalrooftopareaofruralresidentialbuildings.48SouthChinaSeaIslandsHeilongjiang0.9Xinjiang0.2Jiangsu9.8Zhejiang12.7Shanghai1.4Fujian2.4TaiwanHainan0.2Guangxi0.5Yunnan0.5Sichuan0.3Chongqing0.1Guizhou0.2Hunan2.3Hubei2.4Jiangxi3.6Anhui7.6Henan9.3Jilin0.8Liaoning1.6Hebei12.6Beijing0.8Tianjin0.6Shandong23.3Tibet0.0Qinghai0.2Gansu0.8InnerMongolia1.0Ningxia0.8Shaanxi2.1Shanxi3.6Guangdong5.1SouthChinaSeaGWN/ALessthan11to22to5Morethan527Figure13ProvinceswithWholeCountySolarPVPilotsSource:NationalEnergyAdministration,2021SouthChinaSeaSouthChinaSeaIslandsHeilongjiang11Xinjiang5Jiangsu59Zhejiang30Shanghai8Fujian24TaiwanHainan10Guangxi22Yunnan28Sichuan6Chongqing16Guizhou13Hunan12Hubei19Jiangxi8Anhui17Henan66Jilin1Liaoning15Hebei37Beijing6Tianjin4Shandong70Tibet9Qinghai32Gansu46InnerMongolia11Ningxia7Shaanxi26Shanxi26Guangdong32NumberofpilotcountiesN/ALessthan1515to3030to4545to6060to75Example:ResidentialPVandEnergyStorageinChinaTheZeroEmissionVillageinZhuangshang,Shanxiprovince,isamodelprojecttodeploydistributedPVandenergystorageinruralareas.Withatotalinstalledcapacityof2MW,manyofthevillage’shouseholdsarenowequippedwithsolarpanels,energystorage,andsmartinvertersandcanbothsupplypowertotherestofthevillageandsellsurpluselectricitytothecountry’smaingridcompany,StateGridCorporationofChina.285.2DistributedstorageThusfar,developmentofdistributedsolarhasnotbeenaccompaniedbyanincreasingdeploymentofuser-sideenergystorage.Duetosafetyconcernsandlackofclearstandards,policymakershaverestrictedthedevelopmentofuser-sideenergystorageinChina.Asof2021,therewereonly31standardsineffectorunderdevelopmentfortheenergystorageindustry,ascomparedtoover100industrystandardsinplaceforEVs.InApril2021,alargelithium-iron-phosphatebatterycaughtfireatashoppingmallinBeijing,furtherintensifiedsafetyreservations.49Basedonthecautiouslanguagetowardscustomer-sitedstorageincludedinthe14thFive-YearPlanforaModernEnergySystem,whichclearlyprioritizesgeneration-sideandgrid-sidestorageoveruser-sidestorage,50itappearsunlikelythatuser-sidestoragewillbecomemorewidespreadinthenearfuture.PairingrooftopPVandenergystoragecouldbeespeciallybeneficialforChina’scommercialandindustrialconsumers,duetothehigherelectricitypricespaidbytheseusersaswellastheirexposuretowholesaleelectricitycostsafterOctober2021,whenpolicymakersliberalizedretailelectricityprices.Policymakersarelikelytotargetindustryparksforfurtherdevelopmentofrooftopsolar,makingitlogicaltopairsolarwithstoragetoreducepeaksinnetload.Nonetheless,manyobstaclesstillhamperthisdevelopment.IndustrialparkconsumersinterviewedinarecentGIZstudycitedacombinationofeconomicconcernsandthelackofagovernmentmandateastheleadingreasonsfortheoveralllowmotivationtocombinePVwithenergystorage.51RecentdevelopmentsinChina,suchasthewideningofthetime-of-use(TOU)pricedifferencesin2021couldimprovetheeconomicvalueofdistributedstorage.52Establishingtime-varyingpricesandwiderpeak-to-throughratios,asoutlinedinthepolicy,canprovideagreaterincentiveforreducingpeakloadsandwillmakedistributedstoragemoreattractive.In2021,China’sNDRCannouncedseveralimportantpoliciestoremoveadministrativeregulationsonpowerprices.TheNDRCissuedapolicynoticeinJuly2021suggestingthatretailelectricitypricesshouldhavehigherratiosbetweenthepeakrateandtroughrate—specifically,thattheratioshouldbeatleast4:1inregionswherethegenerationdifferencebetweenpeakandtroughishigherthan40%.53Beforeitsimplementation,anNDRCpolicyinOctoberannouncedthatcommercialandindustrialuserswouldswitchfromregulatedretailpriceschedulestomarket-basedcontractsfrom2022.54TheenlargedTOUpricehasmadestoragemoreattractivetorenewablegeneratorsanddistributedrenewableinstallers.In2021,GIZstudiedtheinvestmentreturnsofself-owneddistributedsolarPV,eitheronastand-alonebasisorpairedwithenergystorageinvariousChinesecities.55TheresultshowsthatinNanjingandHangzhouwhenthecommercialtariffpeak-troughratiosincreasedto4:1,theIRRofNanjing’sdistributedsolarPVwouldincreaseto23.80%andthatofHangzhouwouldincreaseto19.19%.Forresidentialcustomers,electricitypricesincludetieredpricingbasedonmonthlyorannualconsumptionlevels.In2011,NDRCadoptedapolicyaimedatencouragingelectricityconservation.Thepolicyrequiredeachhouseholdtohaveonepowermeterandcreatedanelectricitypricepremiumforhouseholdsconsumingmoreelectricitythanthedistrictaverage.Thepricingpolicy,knownasladderpricing,keepspricesunchangedfor80%ofcustomers,butcreatesa2ndand3rdtierofresidentialcustomersinthe80-95%percentilesand95-100%percentilesoflocaldistrictmonthlyorannualaveragehouseholdpowerconsumption,charginghigherretailpricesforthesetiers.56However,thetieredpricingapproachprovidesnoincentivetoreducepeakconsumption,andusersmayonlybeswitchedtothehigherrateaftertheyhaveexceededthethresholdtowardstheendofameasurementperiod—suchaslateintheyear,whentheopportunitytoreducepeakconsumptionhasalreadypassed.Althoughresidentialelectricityaccountsforasmalloverallshareofnationalelectricityconsumption,summertimecoolingisamajorfactordrivingpeakloadgrowthinmosturbanareas,andalsocausesstrainforolderdistributiongridsinruralareas.Urbancoolingloadshavegrownbyafactorof5xsince2000,andrepresentupto50%ofsummerelectricityloadpeaksinmajorcities.57Electrificationoftransportationandheatingwillexacerbatetheproblem,increasingtheimportanceofintroducingtime-basedpricingsignalsforresidentialconsumers.5.3CentralizedstorageInthepolicythatissuedin2021onmulti-energycomplementarity,NEAemphasizedonrenewableenergypairingwithstorage.58UntilJune2022,19provinceshaveissuedpoliciesforrenewablestopairwithstorage.Typicalrequirementsspecifystorageequalto10%ofpeakoutput,with2-hoursstoragecapability.Inotherwords,a100MWwindplantwouldhave20MWhofstorage.29Figure14ProvinceswithstoragerequirementforrenewablesSource:GIZ2022NDRCandNEAissuedanotherpolicyinMay2022encouragestoragetoparticipateinthemid-to-longtermandspotmarket.59Thepolicyaimstousestorageasapeakregulationandgenerationresourcesthroughcontractsforpeakandtroughhours.Inadditiontothesepolicies,theImplementationSchemefortheDevelopmentofNewEnergyStorage(2021-2025)mentionsestablishinganenergystoragedevelopmentfundthataimsfora30%reductionofthecostsperunitofbatterystorageby2025.605.4Demand-sidemanagementInrecentyears,Chinahasexperiencedpowershortagesinsummerandwinter.Toguaranteethedailypowerconsumptionforresidentialusers,apolicyknownasorderlyconsumptionmeasureswouldapplytoenergy-intensiveandemission-intensiveconsumersaswellascommerciallighting.Itrequiresindustrialconsumerstoreducepowerconsumptionatthepeaktimeperiod,orshiftloadstoothertimes.61ThepowerrationingmeasuresapplytoEnergyadministratorsinChinahavelongrealizedtheimportanceofdemand-sidemanagement.Whenthere’sapowershortage,thepowerdemandofthefollowingusershavepriority:62Publicsectorandgovernmentthatmaintainnationalsecurityandsocialorder;Securityloadforenterprisesthatmayexperiencepersonnelinjuriesormachinedamagesifthere’sapoweroutage,suchashazardouschemicalproducersandmines;Hospitals,financialinstitutes,andschools;Utilities,suchasheating,cooling,andenergyproviders;Residentialandagricultureusers;Nationalkeyprojectsandmilitaryenterprises.Thepowerconsumptionofthefollowingusersshallbelimited:63Non-complianceprojects;Eliminationandrestrictionenterprisesintheindustrialrestructuringcatalogue;Enterpriseswithenergyconsumptionperunithigherthanthenationalorlocalmandatoryenergyconsumptionlimit;SouthChinaSeaIslandsSouthChinaSeaSouthChinaSeaIslandsXinjiangJiangsuZhejiangShanghaiFujianHainanGuangxiHunanHubeiAnhuiHenanLiaoningHebeiTianjinShandongQinghaiGansuInnerMongoliaNingxiaShaanxiShanxiSouthChinaSeaN/AOnlywithmunicipalorcountylevelpolicyStoragerequiredforsolarfacilitiesonlyStoragerequiredforwindfacilitiesonlyStoragerequiredforbothsolarandwind30Landscapelightingandillumination;Otherenergy-intensiveandemission-intensiveenterprises.ChinalaunchedDSMpilotsinfourcitiesin2013,namelyBeijing,Tangshan,SuzhouandFoshan.64By2021,nineprovinceswithintheStateGridregionhaveissuedsupportingpoliciesforDSM.Amongtheseprovinces,Shandong,Zhengjiang,GansuplannedtoallowDSMtoparticipateinthespotmarket,whilstnorthernHebeiallowsittoparticipateintheancillaryservicemarket.65Inrecentyears,marketisplayingmoreimportantroleinallocatingdemand-sidemanagementresources,andmarketparticipantsaregrowingmorediversified,withpoliciesencouragingresidential,retailors,aggregators,storage,andEVchargingtoparticipateinthemarket,thoughthisisstilllargelyavisionforthefuture.66The14thFive-YearPlansetsatargetofDSMproviding3-5%ofthemaximumloadin2025.67Currently,thereisnopublicdataonthepercentageofpeakloadsubjecttoDSM,anditisunclearhowgovernmentofficialswillmonitorthistargetorhowfrequentlyresultswillbeavailable.Onepossibilityistomeasurethevolumeofload-controlcontractssignedbyindustrywiththelocalgridcompanies.Inthiscase,the3-5%targetwouldapplytoacapacityamount,butnottotheactualvolumeofpeakloadshifted.5.5CoalplantflexibilityAccordingtoa2021policytarget,Chinaaimstoretrofit200GWexistingcoalpowerplantcapacityforincreasedflexibilityandtherebyadd30-40GWofsystemadjustmentcapacity.68Bytheendof2019,Chinahadretrofitted57.8GWcoalpowerplants,onlyaround25%ofthe13thFive-YearPlantargetof220GW.69Theslowinvestmentreturnistheoneofthemainreasonsforthelackofincentiveforcoalpowerretrofit.AccordingtotheChinaEnergyInformationPlatform,currentcostsforcoalpowerplantretrofitarearoundRMB500-1500/kW.70However,thecoalpowerpricescanonlyfluctuate20%abovethebaselineprice,71andalmostallpoweristradedonmonthlyandannualbilateralcontractmarkets,withlimitedspotmarkettradingincertainpilotprovinces.Thelackofaspotmarketthatcouldprovideshort-termincentivesforflexibilitysubstantiallyreducestheincentiveforflexibleoperationsorinvestmentinflexibility.Insufficientcompensationfortheprovisionofancillaryservicesisanotherreasonforthereluctanceforcoalpowerplantretrofit.725.6AncillaryservicemarketsAncillaryservicessuchasfrequencyregulation,voltagecontrolandblackstarthelpmaintainthesecureandstableoperationoftheelectricgrid.Ancillaryservicesmarketsareespeciallyimportantasvariablerenewablepowergrowsinimportanceonelectricgrids.InChina,ancillaryservicesoftenincludesrampingplantoutputupordowntofollowload,sometimesalsocalledpeakregulation—amajordifferencefromEurope,wherespotmarketswouldperformthisfunction.Previously,China’spowersystemprovidedonlylimitedfundsforancillaryservices,andeffectivelyrequiredcoalplantstopayoneanotherforsuchservices.Startingin2018reformshaveestablishedancillaryservicemarketpilots,startingwithNortheastChina,focusedonpeakregulation.73China’sancillaryservicesmarketsinitiallylimitedparticipationtocoal-firedgenerators,butmorerecentpoliciescallforopeningupancillaryservicesmarketstorenewableenergy,batteriesandthedemandside.NEAissuedtwonewpoliciesregardingancillaryservicebytheendof2021.74Thepolicyallowsmorediversifiedentitiestotradeintheancillaryservicemarket,includingnewtypesofstorage,EVchargingnetworks,aggregatorsandVPPs.Servicesalreadytradedinthespotmarketshallnotbeincludedintheancillaryservicemarket.Thepolicyalsoimplicitlystatesthatforinter-provincialandinter-regionaltrading,thecontractshouldincluderesponsibilityandcompensationforancillaryservices.Accordingtothepolicy,therearetwowaysforancillaryserviceproviderstorecovercosts.75Thefirstthroughafixedcompensationfee,determinedbyprovincialenergyadministrators.Thealternativeisthroughamarket-determinedprice.31Table3Fundingsourcesfordemand-sidemanagementinChina76ProvinceFundingsourcesforDSMJiangsuPeakTariffZhejiangSurplusesfrompowerpurchaseinInter-regionalspotmarket;exploringmarket-basedsharingmechanismsShanghaiHistoricalseasonaltariffdifferentialofsummerHenanIncludedintheT&DpricesapprovalHunanProvincialpowerCompanyHubeiPowerpricedifferencecorrespondingtoThreeGorges'incrementalgenerationcapacityShandongEmergency:sharethecostaccordingtorelatednationalregulationsEconomical:ClarifywhenthespotmarketisoperatingcontinuouslyTianjinSpecialfundingfordemand-sidemanagementChongqingHighwaterperiodconsumesthepricedifferenceoftheadditionalpowerpurchaseduringthevalleyperiodinSichuanShaanxiAnnualsurplusesfrompowerpurchaseinInter-regionalspotmarketGuangdongSharedbyusersintheregionwithpowerdemand5.7RelevanceofGermanexperienceTheGermanexperienceswithdistributedgenerationandsubsequentgridproblems,asexplainedinsection2,arelikelytobecomerelevantinChinaoncetheexpansionofsmall-scalesolarPVpassesacriticalthreshold.Withfuturedistributiongridsabsorbingever-higherlevelsoffeed-in,avoidingviolationsofthermallimitsofnetworksandvoltageproblemswillrequirecarefulplanningandnewregulatoryincentives.Gridexpansionisonepotentialsolution,butinmanycasesthisrepresentsthemostcostlyapproach.Curtailmentofrenewablefeed-inpreservesgridstabilitybutwastescleanenergyanddirectlyaffectstheeconomiccasefordistributedrenewableenergydeployment.Distribution-levelflexibilityfrombatteriesandDSMmeasurescanmakeasignificantcontributiontothesolutionofthegridproblems,butrequiresregulatorysupport.Itisimportanttonotethatthetechnicalavailabilityofflexibilityinthenetworkisnotasufficientconditionforcongestionmanagement:Asexplainedinthisreport,dependingonwhetherconsumersoraggregatorsprogramuser-sitedbatteriesforminimizinggridimpactsversusmaximizingself-consumption,suchbatteriescaneitherhelporharmnetworkstability.Flexibilityinthemarket,suchasforthepurposearbitragebyloadshifting,isnotnecessarilybeneficialforthenetwork.Toharnessthepotentialofflexibilityfordistributionandtransmissiongrids,regulatorychangeisrequired:Regulationmustallowdistributionnetworkoperatorstoengageincontractswithprovidersofflexibilitytomakeitavailablefordecentralizedcongestionmanagementandfurtherancillaryservices.Moreover,itmustenableaggregationofdecentralizedflexibilityassetstomakeitavailabletothetransmissiongridoperator.Smartgridelementsareaprerequisitefortheuseofdecentralizedflexibility.Theseallowgridoperatorstomonitorandcontroltheirnetworks.RegulatorymeasurestoimplementthesereformsinChinaarelikelytodifferfromtheGermanexperienceinmanydetails,owingtothedifferentstructureoftheelectricitysupplyindustry.Regulatorsmustensure,however,toincludeanadequateincentiveforgridfriendlyuseofflexibilityassets.Tosomeextent,suchincentivescanbeprovidedbydynamicgridfeesthatmakeconsumptionandfeed-inexpensivefortheprosumerduringtimesofcongestion.However,thedirectuseofflexibilitybythedistributionnetworkoperatorvialoadresp.feed-incontrolismoreeffective.Tomakeitworkeconomically,however,theDSOmustremunerateflexibilityassetownersfortheirgridservices.Withoutsuchincentives,potentialprosumerswillhaveinadequateincentivetodeploydistributedrenewablespairedwithstorageandtooperateitinamanneroptimalforboththegridandvarioususervaluessuchasreliabilityandcleanenergyconsumption.Withoutsuitableincentivesforinvestmentandoperation,themarketforstorageinvestmentcouldbeseriouslydistorted—forexample,resultinginexcessinvestmentingeneration-sitedstoragethatresultsinhigherdistributiongridcoststomanagein-feedofdistributedPV.Providedasuitableframeworkisintroduced,decentralizedflexibilityhasalargepotentialtocontributetosystemandnetworkintegrationofdistributedgeneration,mostnotablysmall-scalesolarPV,andthustoasuccessfulChineseenergytransition.5.8SuggestionsfordecentralizedflexibilityinChinaTopromotetheintegrationofdistributedrenewableenergyintonetworks,Chineseregulatorsshouldintroduceregulationaimedatencouragingdemand-sideflexibility,includingbothDSMandstorage.Currently,duetothelimitedavailabilityofmarket-basedincentives,DSMintheChinesecontextisusuallyconsideredasacost.MostDSMprogramparticipantsare32industrialcustomerswhoparticipateinpeakshavingprogramsandreceivepaymentinreturn.Whilereformedtime-of-userateswillincentivizecommercialandindustrialcustomerstodomore,therearepresentlylimitedreal-timesignalsaroundflexibility,andthosepricesignalsthatexistarefocusedonpeakshaving,ratherthanflexibilityassuch.Further,residentialconsumershavenoincentivetocontributetoreducingsystempeaks,eitherbymodifyingconsumptionoroperatinguser-sitedstoragetobenefittheneedsofthegrid.Sinceresidentialandcommercialheating,cooling,andEV-chargingloadsarelikelytogrowincreasinglyimportantasafactordrivingpeakloadgrowth,morereal-timesignalsareneededtoincentivizesuchconsumers—andtheirpropertymanagers,forlargebuildingsinurbanareas—toparticipateinDSM,eitherdirectly,orthroughaggregatorservicecompanies.Policymakersshouldincentivizedeploymentofsmartgridelementsintothedistributiongridtoallowthemonitoringandcontrolofflexibilityassets.Foroveradecade,mostChinesecitieshavedeployedsmartmetersforresidential,commercial,andindustrialcustomers.However,thesefirst-generationmetersarefocusedonremotemonitoring,billing,andpayment,ratherthanonreal-timeloadcontrolandmonitoring.Further,metershavelimitedabilitytoenablereal-timesignalstocustomersaboutpeakloadeventsoropportunitiestoparticipateindemandresponse.Inthecurrentdecade,smartgriddevicesshouldbedeployedthroughoutthegrid,includingparticularlyforcustomerswithvaluabledemandresponseloadssuchascontrollableHVAC,heatpumps,EVchargers,orlargedataprocessingloads.Totheextentpractical,gridoperatorsshouldshareinformationfromsmartgridmonitoringwithflexibilityassetownersaggregatorstoassuretheycanparticipateinanymarketforgrid-friendlyflexibilityservices.China’spresentelectricitysystemischaracterizedbylowlevelsofpublicdata.Whereasthecurrentdailyloadandgenerationprofilesarewidelyavailableinmostadvancedeconomies,suchinformationisconsideredsensitiveinChina.Withoutreal-timepricinginformation,customersandaggregatorshavenoabilitytorespondtogridneeds.Withoutdataonpresentloadsandprices,customersandinvestorshavenovisibilityonwhetherinvestmentinnewflexibilityassets,suchasstorageorcontrollableloads,wouldbeeconomicallyattractive.Administratively-setprices,suchasTOU,canprovideonlyapartialsignalaboutthevalueofflexibilityorpeakshaving,wherethegrid’sneedsarelikelytochangeonadailyandevenminute-by-minutebasis.Remunerationforflexibility,whetherdeterminedbyreal-timecongestionvaluesorviaadministrativeformula,shouldreflectthetruecostofnetworkuseandthevalueofavoidedgridinvestmentcosts.AsthediscussionsinGermanyhavemadeclear,increaseddeploymentofrenewableenergyatalllevelsresultsinagreaterdemandforflexibility,andthisimpliesthatthevalueofflexibilityisrisingovertime.AlthoughsomereformsinChinahaveenabledpaymentforcertaintypesofflexibility,themainparticipantsinpeakshavingsofararegeneratorsandlargeindustrialcustomers,andmanysuchpaymentsaredeterminedbystaticadministrativemeasures.Asthepenetrationofrenewableenergyrises,andasurbanheatingandcoolingloadsincreaseasashareofpeakload,itiscriticaltoprovideremunerationtoallmarketparticipantswhocanprovideflexibilityservices.Totheextentpractical,paymentfordemand-sideservicesshouldavoiddiscriminationbetweenflexibilityprovidedbydifferentcustomerclasses,aggregators,generators,orenergysuppliers.DynamicgridfeesareonewayforDSOstoincentivizeflexibility.Directloadcontrolbatteriesandotherdemand-sidedevicesforcongestionmanagementpurposes.ThisuseofflexibilityshouldbestrictlybasedonacontractbetweentheDSOandtheassetownerstoavoidadistortionofinvestmentincentives.Finally,thegovernmentshouldestablisharegulatoryframeworkfortheroleoftheaggregator.China’srecently-issuedfive-yearplansincorporatenumerousreferencestoaggregatorservices,butforthemostparttherearefewwaysforaggregatorstoengagecustomerstoday,duetotheabsenceofreal-timepricesignals.Specificregulationsmustenableaggregatorstoharnesstheflexibilityofdecentralizedflexibilityonthesystemlevelbyallowingthemtoengageintocontractswithfinalconsumers,andearnreturnsfromprovidingflexibilityservicestothegridandgenerators.33Figure1ShareofREintotalprimaryconsumptionandelectricitygeneration.................................................................................5Figure2InstalledcapacityofPVinGermanybysize............................................................................................................................6Figure3FlexibilityrequirementswithhighsharesofRE–exampleloadcurvesfortwoweeksduringthewinterinGermany9Figure4Thenewrolesofthedistributionsystemoperators............................................................................................................11Figure5Alternativegovernancemodelsforflexibilityuse................................................................................................................14Figure6Alternativemodelsforaggregationofdemandresponse..................................................................................................15Figure7Prosumerbatteryusedforincreaseofself-consumption..................................................................................................17Figure8Grid-friendlyuseofprosumerbattery...................................................................................................................................18Figure9GridandMarketapplicationsforDSM..................................................................................................................................20Figure10ApplicationofloadcontrolagreementsbyDSOsinGermanyin2021bysharesofsmallconsumerdevices...........22Figure11China’sPVcapacitydevelopmentbycategorybetween2010and2021.........................................................................25Figure12China’scumulativedistributedsolarPVcapacitybyprovincein2021............................................................................26Figure13ProvinceswithWholeCountySolarPVPilots.....................................................................................................................27Figure14Provinceswithstoragerequirementforrenewables........................................................................................................29Listoffigures34Table1Overviewoverservicesprovidedbybatteries19Table2ApplicationareasandendusesectorssuitedforDSM(ownrepresentationbasedondena2021andFfe2021)21Listoftables351“AGEnergiebilanzenlegtBerichtfür2021vor,“AGEB,28March2022,athttps://ag-energiebilanzen.de/ag-energiebilanzen-legt-bericht-fuer-2021-vor/.2“MehrFortschrittWagen,”SPD,Grüne&FDP,December2021,athttps://www.bundesregierung.de/breg-de/service/gesetzesvorhaben/koalitionsvertrag-2021-1990800.3“FlexibilityTechnologiesandMeasuresintheGermanPowerSystem,“dena,January2021,athttps://www.energypartnership.cn/fileadmin/user_upload/china/media_elements/publications/2022/Flexibility_Technologies_and_Measures_in_the_German_Power_System.pdf.4“AssessingpowersystemadequacyinGermanyandEurope,andlessonsforChina,“dena,April2022,athttps://www.energypartnership.cn/fileadmin/user_upload/china/media_elements/publications/EnTrans/Assessing_power_system_adequacy_in_Germany_and_Europe_and_lessons_for_China.pdf.5HarryWirth,“AktuelleFaktenzurPhotovoltaikinDeutschland,“FraunhoferISE,17July2022,athttps://www.ise.fraunhofer.de/de/veroeffentlichungen/studien/aktuelle-fakten-zur-photovoltaik-in-deutschland.html.6“EEGinZahlen–2019,”Bundesnetzagentur,2020,athttps://www.bundesnetzagentur.de/SharedDocs/Downloads/DE/Sachgebiete/Energie/Unternehmen_Institutionen/ErneuerbareEnergien/ZahlenDatenInformationen/EEGinZahlen_2019_BF.pdf?__blob=publicationFile&v=3#:~:text=EEG%20in%20Zahlen%202019%201%20Vorwort%202%2F83%2031.12.2019,%28Anzahl%29%207.222%20602%2015.122%2011%2028.363%201.467%201.868.1561.920.943.7Dr.HarryWirth,“AktuelleFaktenzurPhotovoltaikinDeutschland,“FraunhoferISE,17July2022,athttps://www.ise.fraunhofer.de/de/veroeffentlichungen/studien/aktuelle-fakten-zur-photovoltaik-in-deutschland.html.8JanFiggeneretal,“ThedevelopmentofbatterystoragesystemsinGermany:Amarketreview(status2022),”15March2022,athttps://arxiv.org/abs/2203.06762.9JanFiggeneretal,“ThedevelopmentofbatterystoragesystemsinGermany:Amarketreview(status2022),”15March2022,athttps://arxiv.org/abs/2203.06762.10“Directive(EU)2018/2001oftheEuropeanParliamentandoftheCouncilof11December2018onthepromotionoftheuseofenergyfromrenewablesources,”EuropeanUnion,accessedon15July2022,athttps://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG&toc=OJ:L:2018:328:TOC.11“Directive(EU)2019/944oftheEuropeanParliamentandoftheCouncilof5June2019oncommonrulesfortheinternalmarketforelectricityandamendingDirective2012/27/EU,”EuropeanUnion,accessedon15July2022,athttps://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019L0944.12“TodaremoreProgress–AllianceforFreedom,JusticeandSustainability.Coalitiontreaty2021–2025amongtheSocialDemocraticPartyofGermany(SPD),Alliance‘90/TheGreens,andtheFreeDemocrats(FDP),”originallypublishedinGermanas“MehrFortschrittwagen-BündnisfürFreiheit,GerechtigkeitundNachhaltigkeit.Koalitionsvertrag2021–2025zwischenderSozialdemokratischenParteiDeutschlands(SPD),BÜNDNIS90/DIEGRÜNENunddenFreienDemokraten(FDP)”,DeutscheBundesregierung,accessedon15July2022,athttps://www.bundesregierung.de/resource/blob/974430/1990812/04221173eef9a6720059cc353d759a2b/2021-12-10-koav2021-data.pdf?download=1.13“FlexibilityTechnologiesandMeasuresintheGermanPowerSystem,“dena,January2021,athttps://www.energypartnership.cn/fileadmin/user_upload/china/media_elements/publications/2022/Flexibility_Technologies_and_Measures_in_the_German_Power_System.pdf.14“UnlockingthePotentialofDistributedEnergyResources:Powersystemopportunitiesandbestpractices,”InternationalEnergyAgency(IEA),May2022,athttps://www.iea.org/reports/unlocking-the-potential-of-distributed-energy-resources.References3615Luhmannetal,“Anapproachforcost-efﬁcientgridintegrationofdistributedrenewableenergysources,”Eng.Sci.,pp.447-452,01December2015,athttps://www.semanticscholar.org/paper/An-Approach-for-Cost-Efficient-Grid-Integration-of-Luhmann-Wieben/35f7b0a3f90a6618566a015ce25f91de79668956.16Iwehetal,“DistributedGenerationandRenewableEnergyIntegrationintotheGrid:Prerequisites,PushFactors,PracticalOptions,IssuesandMerits,”Energies,29August2021,athttps://doi.org/10.3390/en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