In the rapidly evolving energy landscape, a growing number of distributed energy resources (DERs) are being deployed on the grid, providing flexibility, resilience, cost savings, and clean energy to communities. However, as the number of grid-connected DERs grows, their full potential will only be realized if the right grid infrastructure is in place, including transmission systems that complement and support DER deployment.  

Yes, that’s right; getting the most out of DERs is not just about making changes to the distribution system. A new report by Strategen, Better Together: The Benefits of Coordination in the Development of Transmission and Distributed Energy Resources, explores the symbiotic relationship between transmission and DERs. 

The Symbiotic Relationship: Transmission and DERs 

Transmission and DERs exist essentially at opposite ends of the electricity system, and traditionally, they have been planned, developed, and operated independently. Transmission lines are essential for transporting electricity over long distances, while DERs, such as rooftop solar, small-scale wind, demand flexibility, and household energy storage, are located near where the electricity is consumed. 

Yet, as the report by Strategen illustrates, these two elements of the grid have the potential to work together to strengthen grid reliability and increase efficiencies in planning and operations. Here are key ways that transmission and DERs can complement each other: 

• Maximizing Grid Efficiency: By reducing demand, DERs alleviate stress on the transmission system and can reduce, defer, or avoid the need for new transmission investments. 

• Facilitating Renewables Integration: Strategic transmission investments can support the export of excess energy generated by DERs, ensuring renewable energy is utilized where it is most needed and enabling broader deployment of distributed renewable energy sources. 

• Enhancing Grid Reliability and Resilience: By providing localized power during outages, DERs contribute to grid resilience, while transmission infrastructure supports broader stability by enabling power transfers across regions during emergencies. 

Case Studies: Australia and Hawaii – Leveraging Transmission to Manage DER Overgeneration 

To understand the benefits of coordinated planning, let’s look at how Australia and Hawaii, two regions with high DER penetration, are leveraging transmission and DERs to manage overgeneration to create a stronger and more reliable grid. 

Australia: With one of the world’s most decentralized energy systems, Australia’s embrace of DERs has provided valuable lessons for other regions. Rooftop solar has become one of the country’s largest sources of electricity generation. However, without the necessary transmission investments, the country has had to curtail some of this local generation, wasting valuable resources that could otherwise be exported to regions with higher demand. To address this, key stakeholders including, the Australian Energy Market Operator (AEMO), SA Power Networks, and the Australian Renewable Energy Agency (ARENA), are proactively planning for a distributed future in concert with transmission buildout. For example, SA Power Networks, the electric distribution company for South Australia, projects that by 2030, much of the electricity used by its customers will be produced locally, with the entire network capable of running in reverse to supply surplus solar energy to large industrial users, and even export it to other states. 

Hawaii: DERs are playing a crucial role in helping the state transition from expensive oil-burning power plants to renewable energy. However, the absence of adequate transmission infrastructure to move energy between islands or distribute excess generation to other parts of the state highlights the limitations that arise when DERs and transmission are not planned in tandem. Hawaii is exploring regulatory innovations to bring DERs and transmission into better alignment, such as through performance-based regulation (PBR) that ties utility performance to desired outcomes related to DER asset effectiveness – encouraging DERs and transmission to be developed in a complementary manner. 

An additional example featured in the white paper is Southern California, served by Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) territories. These examples highlight the importance of proactive planning that integrates both transmission and DERs, a lesson that is increasingly relevant as the US energy landscape changes. Rather than wasting excess energy from customer-sited resources, we can ensure that our transmission systems support the export of power beyond the neighborhoods where it is located to where it is needed most. 

The Future of Energy Planning 

Planners should no longer think of transmission and DERs as separate parts of the energy planning process. Because DERs can reduce the need for new transmission lines in some cases, transmission must be planned with distributed energy resources in mind to avoid inefficiencies and unnecessary spending. Similarly, planning around DERs should include ways to maximize their benefits to transmission. 

In the United States, the growth of distributed energy resources is significant, with over 5 million solar installations already in place. The majority of these installations are located behind the meter, on residential rooftops, accounting for 97% of all solar installations. This decentralized energy generation is not only transforming the grid but also heightening the need for improved coordination between DERs and transmission infrastructure. According to the Solar Energy Industries Association, by 2030, the number of solar installations is expected to double, further underlining the importance of integrated energy planning that maximizes the benefits of both DERs and transmission. 

Key Technologies in the Transmission-DER Nexus 

Technologies that allow transmission and DERs to work together will be key to solving these challenges. Advanced transmission technologies, DER management systems, and distributed control systems are increasingly necessary for maximizing the potential of DERs. For instance, advanced inverters and substation upgrades that enable bi-directional power flows can help to safely export surplus DER generation onto the transmission grid, ensuring that renewable energy can be used where it is most needed. 

Virtual Power Plants (VPPs) – aggregations of DERs that are operated in a coordinated fashion to provide grid services – are playing a growing role in enhancing overall grid flexibility, which supports transmission by reducing congestion and managing peak loads. This not only aids in the integration of large-scale renewable energy sources but also complements transmission infrastructure by easing the load on the grid, thus enabling more efficient energy distribution across the network. 

Conclusion: A Call to Action 

Improved coordination between transmission and DERs is essential to achieving our clean energy goals. DERs offer the opportunity to decentralize energy production, empower consumers, and reduce emissions. But without corresponding investments in transmission infrastructure, their potential will be limited. 

For decision-makers, the time is now to prioritize policies that recognize the importance of coordinating between transmission and DERs. By planning these elements together, we can ensure that DERs and transmission infrastructure complement one another, providing flexible, resilient, and clean energy for all.