Advances in Hosting Capacity Assessment and Enhancement Techniques for Distributed Energy Resources: A Review of Dynamic Operating Envelopes in the Australian Grid

Abstract

The increasing penetration of distributed energy resources (DERs) such as solar photovoltaic (PV) systems, battery energy storage systems (BESSs), and electric vehicles (EVs) in low-voltage (LV) and medium-voltage (MV) distribution networks is reshaping traditional grid operations. This shift introduces challenges including voltage violations, thermal overloading, and power quality issues due to bidirectional power flows. Hosting capacity (HC) assessment has become essential for quantifying and optimizing DER integration while ensuring grid stability. This paper reviews state-of-the-art HC assessment methods, including deterministic, stochastic, time-series, and AI-based approaches. Techniques for enhancing HC—such as on-load tap changers, reactive power control, and network reconfiguration—are also discussed. A key focus is the emerging concept of dynamic operating envelopes (DOEs), which enable real-time allocation of HC by dynamically adjusting import/export limits for DERs based on operational conditions. The paper examines the benefits, challenges, and implementation of DOEs, supported by insights from Australian projects. Technical, regulatory, and social aspects are addressed, including network visibility, DER uncertainty, scalability, and cybersecurity. The study highlights the potential of integrating DOEs with other HC enhancement strategies to support efficient, reliable, and scalable DER integration in modern distribution networks.