The power industry is undergoing a transition. Power grids are evolving to become smart grids. This trend is being accelerated in several regions by the further development of renewable power sources, which are increasingly penetrating the grid network in the form of distributed energy resources (DER). A growing number of these DER assets are highly intermittent energy resources. Wind turbines and solar panels in particular pose a challenge when it comes to predicting and controlling supplies[1]. Due to the merit order effect [2], this intermittent renewable power generation could decrease the market price [3, 4] of energy. However, the growing importance of volatile renewable sources in the energy mix will lead to critical situations within the power grid [5, 6]. Power markets have to be ready for smart grids so that they are capable of dealing with the grid-wide integration of DER assets while at the same time efficiently controlling decentralized power generation units as they transition to autonomous operating modes (see Figure 1). In order to do this, existing power grids will have to be updated – creating a new smart grid paradigm [7, 8].
Siemens White Paper Transactive Energy System
