Local Flexibility Markets in the Context of Reactive Power Provision by Distributed Energy Resources

Abstract

India strives to achieve 500 GW generation from non-fossil fuels and a 50% electricity generation from Renewable Energy Sources (RES) by 2030. This high quantum of RES would substantially increase the penetration of Distributed Energy Resources (DERs). Distribution System Operators (DSO) would face substantial operational and financial challenges to handle these DERs as they are intermittent, like voltage limit violations, network congestion, and reverse power flows in the distribution grid. Apart from these, a substantial quantum of reactive power would also be available from these DERs that has to be managed optimally. Due to the high DER penetration and other intermittencies, there would be reactive power imbalances in the transmission network. DERs cannot directly provide reactive power support to Transmission System Operator (TSO) due to existing regulations. The best solution for managing all these discrepancies caused by DER integration is to make the current system more flexible in the generation and consumption of both active and reactive power. For this purpose, DSOs move towards market mechanisms like Local Flexibility Markets (LFM), which provides a market platform for the DSO to procure and utilize the available Demand Side Flexibility and aggregate DERs as a Virtual Power Plant (VPP) to overcome the multifaceted challenges in the Distribution Networks (DNs). This paper gives a comprehensive overview of the aspects of local flexibility with a specific focus on reactive power provisions from DERs and the adjoining regulations backing their participation in LFM and providing reactive power support to TSO.