Toolbox Entry: Unlocking the Potential of Distributed Energy Resources: Power system opportunities and best practices

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Last edited on 27/11/2022 by Hector Alfaro
(Date format: DD/MM/YYYY)

General Information

ID Number
Main Author
International Energy Agency
Publication Year
Type of Entry
Study Report

Enabling Distributed Technologies
  • Battery Energy Storage Systems
  • Electric vehicles
  • Distributed generation (solar)
  • Distributed generation (small hydro)
  • Distributed generation (others)
Market-based and Tariff-based Solutions
  • VPP and aggregators (market integration of DERs)

Distribution Planning
  • Distribution planning / Electrification master plan

Which of the above categories best describe the material
Market-based and tariff-based solutions


DERs can create new power system opportunities, but at the same time, can pose new challenges when a grid has not been properly prepared. Many jurisdictions are just beginning to understand how DERs fit into the wider energy landscape – what they are and what impacts they have on the grid, and how they can be used to improve system reliability and reduce overall energy costs. Meanwhile, other regions have built up experience with DERs, demonstrating that they can provide valuable services to the grid when incentivised with appropriate technologies, policies and regulations. Nonetheless, not all countries use the same electricity market model or are at the same stage of DER penetration, and the fit-for-purpose solutions will vary from place to place. This report reviews lessons from forerunners and distils best practices (with examples and case studies) to help policymakers, regulators and system operators across the globe understand what experience is most relevant to their own situation. Readers will be able to draw on a wide range of practical insights for electricity market design and regulation to help unlock the multiple grid benefits of DER technologies.