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DER systems typically use [[renewable energy]] sources, including [[small hydro]], [[biomass]], [[biogas]], [[solar power]], [[wind power]], and [[geothermal power]], and increasingly play an important role for the [[electric power distribution]] system. A grid-connected device for [[Grid energy storage|electricity storage]] can also be classified as a DER system and is often called a '''distributed energy storage system''' ('''DESS'''). By means of an interface, DER systems can be managed and coordinated within a [[smart grid]]. Distributed generation and storage enables the collection of energy from many sources and may lower environmental impacts and improve the security of supply.
 
One of the major issues with the integration of the DER such as solar power, wind power, etc. is the uncertain nature of such electricity resources. This uncertainty can cause a few problems in the distribution system: (i) it makes the supply-demand relationships extremely complex, and requires complicated optimization tools to balance the network, and (ii) it puts higher pressure on the transmission network,<ref>{{Cite journal|last1=Mohammadi Fathabad|first1=Abolhassan|last2=Cheng|first2=Jianqiang|last3=Pan|first3=Kai|last4=Qiu|first4=Feng|date=2020|title=Data-driven Planning for Renewable Distributed Generation in Distribution Systems|url=https://ieeexplore.ieee.org/abstract/document/9112707|journal=IEEE Transactions on Power Systems|volume=35|issue=6|pages=14357–4368|doi=10.1109/TPWRS.2020.3001235|s2cid=225734643|issn=1558-0679|via=}}</ref> and (iii) it may cause reverse power flow from the distribution system to transmission system.<ref>{{Cite journal|last1=De Carne|first1=Giovanni|last2=Buticchi|first2=Giampaolo|last3=Zou|first3=Zhixiang|last4=Liserre|first4=Marco|date=July 2018|title=Reverse Power Flow Control in a ST-Fed Distribution Grid|journal=IEEE Transactions on Smart Grid|volume=9|issue=4|pages=3811–3819|doi=10.1109/TSG.2017.2651147|s2cid=49354817|issn=1949-3061|url=https://nbn-resolving.org/urn:nbn:de:gbv:8-publ-14890}}</ref>
 
[[Microgrid]]s are modern, localized, small-scale grids,<ref>{{Cite journal|last1=Saleh|first1=M.|last2=Esa|first2=Y.|last3=Mhandi|first3=Y.|last4=Brandauer|first4=W.|last5=Mohamed|first5=A.|date=October 2016|title=Design and implementation of CCNY DC microgrid testbed|journal=2016 IEEE Industry Applications Society Annual Meeting|pages=1–7|doi=10.1109/IAS.2016.7731870|isbn=978-1-4799-8397-1|s2cid=16464909|url=https://academicworks.cuny.edu/cgi/viewcontent.cgi?article=1722&context=cc_pubs}}</ref><ref>{{Cite journal|last1=Saleh|first1=M. S.|last2=Althaibani|first2=A.|last3=Esa|first3=Y.|last4=Mhandi|first4=Y.|last5=Mohamed|first5=A. A.|date=October 2015|title=Impact of clustering microgrids on their stability and resilience during blackouts|journal=2015 International Conference on Smart Grid and Clean Energy Technologies (ICSGCE)|pages=195–200|doi=10.1109/ICSGCE.2015.7454295|isbn=978-1-4673-8732-3|s2cid=25664994|url=https://academicworks.cuny.edu/cgi/viewcontent.cgi?article=1623&context=cc_pubs}}</ref> contrary to the traditional, centralized [[electricity grid]] (macrogrid). Microgrids can disconnect from the centralized grid and operate autonomously, strengthen grid resilience, and help mitigate grid disturbances. They are typically low-voltage AC grids, often use [[diesel generator]]s, and are installed by the community they serve. Microgrids increasingly employ a mixture of different distributed energy resources, such as [[solar hybrid power systems]], which significantly reduce the amount of carbon emitted.