Abstract

This paper studies the relationship between the operational demand-side flexibility provided by the centralised coordination of distributed energy resources (DER) and the mitigation of economic risks in long-term transmission planning. DER coordination could represent an alternative to utility-scale network investments, offering increased operational flexibility, faster deployment, and fewer social licence issues. However, significant uncertainty surrounds DER uptake due to regulation and challenging consumer engagement. A multi-stage Conditional Value-at-Risk (CVaR) scenario-based formulation is introduced to study the techno-economic value of DER coordination across uncertain scenarios and planners’ risk aversion preferences. Using a multi-stage decision tree, we endogenously incorporate long-term planning uncertainties, including DER and renewable energy uptake, retirement of coal generation, fuel and capital costs, as well as lead times. Case studies using real scenarios from Australia's National Electricity Market (NEM) reveal that DER coordination could reduce expected total system costs by up to 11 % and CVaR by 14 %. Coordination could also lead to narrower investment portfolios across several scenarios, with transmission capacity reductions of up to 4 GW in later stages. In contrast, a system lacking DER coordination faces poorer economic performance and a heightened risk of committing to inefficient investment paths, with reliance on high-capital investments increasing by up to 50 % of installed capacity. © 2025 The Author(s)