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A distributed energy resource is a localized source or store of electrical energy connected near the consuming part of an electric power system, commonly through electric power distribution. Examples include a nearby electrical generator, an array of solar cells, and an electric battery with its power-conversion equipment. Energy storage can either absorb or deliver power; calling it a resource does not make it a net source of energy over a complete charge-discharge cycle.^[ref]

For an original boundary calculation, a site consumes $50\mathrm{kW}$, its solar cells supply $30\mathrm{kW}$ at the stated output boundary, and an electric battery supplies $10\mathrm{kW}$. Neglecting site losses, the imported power isIf the same electric battery instead charges at $10\mathrm{kW}$, its signed supply is $-10\mathrm{kW}$ and import becomes $30\mathrm{kW}$. If solar output rises to $70\mathrm{kW}$ while storage is idle, the algebra gives $-20\mathrm{kW}$ import: an export, provided the connection and controls permit that operating point.

The location matters physically. Local generation can reduce upstream electric current when it offsets downstream consumption, but sufficiently large export can reverse the electric current. In a simplified resistive two-terminal branch, $V_s-V_r=RI$ for signed electric current from supply to site; negative $I$ makes the receiving-site electric potential difference higher. This is an illustrative direct current relation, not a complete alternating current feeder calculation.

A group of distributed energy resources becomes a microgrid only with an appropriate boundary and coordinated operation. Installed generating capacity alone does not establish that disconnected operation can regulate the local supply. A useful test records import or export together with each resource's signed power, so an apparent reduction in imported energy is not confused with a change in the consuming electrical loads.

Electric power distribution is the part of an electric power system that delivers electrical energy from supply points to connected electrical loads. It uses conductors, switching and protective equipment, and often electrical transformers to provide suitable local electric potential differences. Electric power transmission mainly transfers bulk power between supply regions and major receiving points; the distinction concerns network function rather than one universal voltage threshold.

A one-line diagram suppresses individual phase conductors to show the supply-to-load structure. The DOE handbook's apparatus example connects utility and standby supplies, buses, switching and protection to the consuming circuits.^[ref] Following the actual connection points is necessary before assigning losses or assuming that two loads share a return path.

For an original two-wire direct current example, a source holds $V_s=240\mathrm{V}$ and supplies a resistive electrical load $R_L=12\Omega$ through an outgoing-plus-return conductor electrical resistance $R_w=0.4\Omega$. Ohm's law givesThe conductor heating is $I^2{R}_w\approx 149.84\mathrm{W}$, while the load receives $I^2{R}_L\approx 4.4953\mathrm{kW}$. Their sum equals the source output $V_{s}I\approx 4.6452\mathrm{kW}$. Assigning the full source electric potential difference to the load would miss both its reduced terminal value and the location of the dissipated energy.

A proposed bench demonstration uses a current-limited low-voltage supply, a known series resistor representing the wires and a separate load resistor. Simultaneously measuring source and load electric potential differences and branch electric current tests the loss calculation. Real alternating current networks add electrical reactance, phase imbalance and protection constraints; the simple example isolates conductor heating rather than representing every distribution effect.

An electric power system is an interconnected arrangement that produces, transfers, controls, and consumes electrical energy. Electricity generation supplies electrical power, electric power transmission carries it between regions, and electric power distribution delivers it to electrical loads. Electrical generators, electrical transformers, and transmission lines perform different parts of this task. The one-line apparatus diagram in the DOE handbook makes these connections concrete: it follows supplies through switching and protection equipment to consuming circuits.^[ref]

A useful calculation separates delivered power from conductor heating. Consider an idealized two-conductor direct current link delivering $P=10\mathrm{MW}$ at load electric potential difference $V=10\mathrm{kV}$, with total outgoing-plus-return electrical resistance $R=0.1\Omega$. Its electric current and resistive loss areDelivering the same power at $100\mathrm{kV}$ reduces the electric current to $100\mathrm{A}$ and the loss to $1\mathrm{kW}$. This is a fixed-load, fixed-resistance comparison; it omits converter loss, insulation constraints, and changes in conductor temperature. In an alternating current network, an electrical transformer changes the operating electric potential difference without itself generating the delivered energy.^[ref]

At each instant, generation, imports, and storage discharge must supply electrical load, exports, losses, and storage charging. A sudden imbalance can initially draw on stored energy; it cannot persist indefinitely without changing the operating state. This electric power balance during a demand step connects network calculations to control and to the smaller, deliberately bounded microgrid.