Integrating Distributed Energy Resources into the Independent System Operators’ Energy Market: a Review

Purpose of Review: In recent years, the rapid growth of distributed energy resources (DER) is bringing up a future of coexisting opportunities and challenges to independent system operators (ISO) as well as DER aggregators as market participants. This paper intends to overview the integration of DERs into the ISO’s energy market from three aspects of (i) ISOs’ existing DER integration programs, (ii) DER aggregators, and (iii) transmission system operator (TSO) and distribution system operator (DSO) coordination. Recent Findings: ISOs and academic researchers have been actively preparing to embrace a high DER penetration future. ISOs’ current programs do not fully consider the interaction and coordination with distribution systems, which otherwise could accommodate an even deeper DER integration. Academia has done a lot of research on this aspect, while practical applicability and jurisdiction considerations are still among the important aspects to be further explored. Summary: Small scales and dispersed locations of DERs make DER aggregation and TSO-DSO coordination inevitably a focus of research, which has been receiving more and more attentions with the increasing of DERs.