Volt/VAR Control and Optimization: Technology, Applications, Regulation and Business Models

by Daniel Munoz-Alvarez, Ben Kellison

Volt/VAR control (VVC) systems comprise a broad collection of hardware and software subsystems whose collective function is to monitor and control power quality through the management of voltage and reactive power levels across the distribution network. VVC systems are a key component of recent distribution automation efforts in the U.S. to monetize multiple streams of value associated with investments in grid modernization and advanced metering infrastructure (AMI).

Advanced VVC systems are aiming to incorporate the use of utility and customer-owned distributed power electronics (including inverter-based DER) to achieve some combination of improved DER hosting capacity and CVR benefit. Business models for VVC systems are evolving from a sole focus on compliance with voltage standards to include multiple regulated streams of revenue.

Adoption of Conservation Voltage Reduction Schemes in U.S., Q4 2016

Source: GTM Research, EIA, and Pacific Northwest National Lab

This report provides an overview and analysis of the U.S. landscape of volt/VAR control (VVC) systems in the context of distribution systems. It describes and compares the different VVC hardware and software solutions currently available in the industry, characterizing and classifying existing VVC solutions based on key aspects that ultimately shape their architecture: data collection and control algorithms.

The report also provides an overview of the traditional and modern use cases for VVC systems and their corresponding business models and value streams, illustrating them using case studies involving seven different utilities across more than 10 U.S. states.

This report is included as part of our Grid Edge Service. To learn more, please contact gridsubscription@gtmresearch.com.


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Daniel Munoz-Alvarez Analyst, Grid Edge

Daniel is a Grid Edge Analyst at GTM Research. He focuses on distribution automation, utility network operations, grid edge network analytics and utilities’ non-wires alternative projects. Prior to GTM, Daniel pursued a PhD in Electrical and Computer Engineering with a minor in Applied Economics at Cornell University. Throughout his doctoral studies, he examined the restructuring of electricity markets for the integration of renewable energy, energy storage, and distributed energy resources. He graduated magna cum laude from Universidad de Los Andes in Colombia with master’s and bachelor’s degrees in Electrical Engineering.

Ben Kellison Director, Grid Research

Ben is the Director of Grid Research for GTM Research, specializing in Distribution Automation, Network Management and Renewables Integration markets.

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