The 33rd China International Exhibition on Electric Power Equipment and Technology
Shanghai International Energy Storage Technology Application Expo / Hydrogen Energy Expo
Distributed Energy Resources (DER) are electricity generation, storage, and demand management assets that are connected at the distribution network level (typically below 35 kV) and are located at or near the point of consumption. DER encompasses a wide range of technologies: rooftop and ground-mounted solar PV systems; small-scale wind turbines; battery energy storage systems (BESS) at residential, commercial, and industrial scale; electric vehicle (EV) chargers with vehicle-to-grid (V2G) capability; fuel cells; micro combined heat and power (micro-CHP) systems; and controllable loads (HVAC, water heaters, industrial processes) that can be adjusted in response to grid signals. The rapid growth of DER — driven by falling solar and battery costs, EV adoption, and supportive policies — is transforming distribution networks from passive delivery systems into active, bidirectional energy platforms. Aggregating DER into virtual power plants (VPPs) enables their collective participation in wholesale electricity markets and grid services.
5 Key Questions About Distributed Energy Resources (DER)
DER is transforming distribution networks in fundamental ways: bidirectional power flows from prosumers (customers who both produce and consume electricity) require protection systems and voltage regulation designed for multidirectional operation; high penetrations of rooftop solar cause voltage rise on distribution feeders during midday hours; EV charging creates new peak demand patterns that can overload distribution transformers; and the aggregation of millions of small DER assets into VPPs creates new market participants that compete with conventional generators. Distribution network operators must invest in network monitoring, automation, and reinforcement to accommodate high DER penetrations while maintaining power quality and reliability.
China's DER development is supported by several policy mechanisms: feed-in tariffs and grid parity policies for distributed solar; the Distributed Energy Storage Development Action Plan targeting 30 GW of distributed storage by 2025; the New Power System Construction Action Plan promoting DER aggregation and VPP development; provincial demand response programmes that pay DER aggregators for load flexibility; and the Green Power Trading market that enables DER owners to sell renewable energy certificates. The National Development and Reform Commission and National Energy Administration jointly oversee DER policy, with implementation varying significantly across provinces.
Distributed generation (DG) refers to small-scale power generation assets connected at the distribution level — primarily rooftop solar PV, small wind turbines, and fuel cells. Distributed storage refers to battery systems and other storage technologies connected at the distribution level — from residential battery systems (5–20 kWh) to commercial and industrial BESS (100 kWh–10 MWh). While DG produces power, distributed storage can both absorb and deliver power, providing greater flexibility for grid management. The combination of distributed generation and storage — particularly solar-plus-storage systems — creates prosumer assets that can optimise self-consumption, provide backup power, and participate in demand response programmes.
DER aggregation uses software platforms to coordinate the operation of many small distributed assets — rooftop solar, batteries, EV chargers, and controllable loads — as a unified virtual power plant (VPP) that can provide grid services including demand response, frequency regulation, and voltage support. Aggregators communicate with individual DER assets via smart meters, home energy management systems (HEMS), or direct device communication, sending dispatch signals and receiving real-time status data. Advanced aggregation platforms use AI and machine learning to optimise dispatch across thousands of assets while respecting individual customer preferences and device constraints.
DER cybersecurity risks arise from the large number of internet-connected devices with varying security standards, the potential for coordinated attacks on aggregated DER to cause grid disturbances, and the sensitivity of customer energy data. A coordinated attack that simultaneously disconnects or modifies the output of millions of DER assets could cause significant frequency and voltage disturbances. Mitigation measures include: mandatory cybersecurity requirements for DER devices and aggregation platforms; network segmentation between DER communication systems and utility control systems; anomaly detection to identify unusual DER behaviour patterns; and incident response plans for DER-related cyber events.
Key Takeaways
Distributed Energy Resources are reshaping the electricity system from the bottom up, transforming passive consumers into active prosumers and creating new opportunities for grid flexibility and renewable integration. China's rapidly growing DER sector — driven by falling solar and battery costs and supportive policies — is creating substantial demand for DER management platforms, aggregation software, and grid integration equipment. EP Shanghai showcases the full spectrum of DER technologies and management solutions.
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