Economic regulation of distribution system operators and its adaptation to the penetration of distributed energy resources and smart grid technologies

Programa de Doctorado en Energía EléctricaEsta tesis hace una revisión de la regulación económica de la actividad de distribución eléctrica. Como resultado de la misma se discuten y proponen adaptaciones necesarias para facilitar la integración de nuevas tecnologías de red y la conexión de recursos energéticos distribuidos de manera eficiente. La tesis comienza con una revisión de la teoría económica que justifica la intervención regulatoria en el sector de la distribución de electricidad y sobre la que se fundamentan las prácticas regulatorias actuales. Asimismo, se proporciona una visión general de la evolución de las prácticas regulatorias en diferentes países a lo largo de las últimas décadas y se describen los nuevos desafíos a los que se enfrentas los operadores de las redes de distribución. Estos desafíos están principalmente ocasionados por la aparición de nuevos usuarios de estas redes, tales como generadores distribuidos o vehículos eléctricos, así como por los desarrollos tecnológicos. A continuación, la tesis presenta una visión general de la metodología seguida para fijar los ingresos permitidos de las empresas de distribución así como las herramientas regulatorias comúnmente empleadas para este fin, haciendo especial hincapié en las técnicas de benchmarking regulatorio. A este respecto, la tesis incluye una nueva clasificación de los diferentes métodos existentes así como una discusión comparativa y exhaustiva sobre las ventajas e inconvenientes de los mismos. Una vez finalizada esta revisión, se propone un marco regulatorio para fijar los ingresos permitidos de las empresas de distribución, adaptado al nuevo contexto marcado por la penetración de nuevas tecnologías y recursos energéticos distribuidos. El objetivo principal de dicha propuesta es proporcionar la estabilidad necesaria para atraer inversiones, minimizando la incertidumbre regulatoria e incentivando a los operadores de distribución a elaborar planes de inversión detallados y precisos. Con el fin de ilustrar la metodología propuesta, se define una estrategia de implantación de la misma en el contexto español, teniendo en cuenta la regulación y la situación actual del sector en este país. Por último, se aborda el diseño de incentivos regulatorios asociados a la calidad de suministro y las pérdidas de energía en las redes de distribución. Primeramente, se hace un repaso del marco teórico que sirven de base para el diseño de estos incentivos y de los diferentes mecanismos empleados. A continuación, se enumeran y discuten en profundidad las principales dificultades existentes a la hora de llevar dicho mecanismos de incentivos a la práctica. Finalmente, se estudia cómo la aparición de nuevas tecnologías de red y la conexión de recursos energéticos distribuidos pueden afectar al diseño e implantación de estos incentivos.This thesis presents a review of the economic regulation of electricity distribution and proposes several recommendations to adapt current regulatory practices to facilitate the efficient integration of smart grid technologies and distributed energy resources. The thesis starts with a review of the economic theory which justifies the regulatory intervention in the electricity distribution sector and which serves as the basis of current regulatory practices. Subsequently, an overview of the evolution of distribution regulation in several countries over the last decades is provided, after which the challenges faced by distribution system operators in the new environment are described. These challenges are mainly related to the connection of new types of distribution network users, such as distributed generators or electric vehicles, and technological developments. Next, the thesis introduces the general methodology followed to set the allowed revenues of distribution companies, as well as the main regulatory tools used for these purposes. Particular emphasis is placed on regulatory benchmarking. The thesis proposes a new taxonomy for classifying the different benchmarking approaches and provides a comprehensive comparative discussion about the pros and cons of each approach. After this review, a framework to determine the allowed revenues of distribution system operators suitable for the new context with smart grid technologies and distributed energy resources is proposed. The major goal of this proposal is to provide stability required to draw investments, whilst mitigating regulatory uncertainties and encouraging distribution companies to elaborate accurate investment plans. In order to illustrate the proposed approach, an implementation strategy for the Spanish context is defined, taking into account the specific conditions of in this country. Finally, the thesis addresses the design of regulatory incentives related to quality of service and energy losses in distribution networks. Firstly, the theoretical framework that guides the design of these incentives and the different mechanisms used is reviewed. Thereinafter, the practical difficulties that can be encountered when implementing the aforementioned mechanisms are enumerated and discussed. Lastly, the thesis analyzes how the penetration of smart grid technologies and distributed energy resources can affect the design and implementation of these incentive schemes

Regulatory strategies for selected Member States (Denmark, Germany, Netherlands, Spain, the UK):IMPROGRES project

Research Project supported by the European Commission, Directorate-General for Energy and Transport, under the Energy Intelligent Europe (EIE) programmeThis Work Package 6 report of the IMPROGRES project provides an overview of regulatory strategies and incentives, conducive to (i) network integration of increasing levels of distributed generation including notably intermittent renewable technology such as wind power and solar photovoltaics (PV) as well as (ii) options for reducing impacts on surging network integration costs. Similar to the IMPROGRES project in general, this report focuses on European distribution networks. It includes specific country studies of Denmark, Germany, the Netherlands, Spain and the UK. This summary presents the main findings of this report

New business models enabled by smart grid technology and their implications for DSOs

In this paper, new business models (BM) enabled by smart grid technologies are presented and discussed. We focus on the business opportunities for four main agents, namely the Distribution System Operator (DSO), the aggregator, the end-users, and the newly envisioned data service provider. We discuss the challenges and opportunities for the DSO to implement their new BMs and interact with other BMs. We highlight the several regulatory barriers that may still exist for the implementation of each BM. Moreover, this paper also invites for a future stakeholder consultation and a quantitative economic evaluation of each BM. The result of this work in progress should lead to regulatory recommendations to foster the adoption of cost-effective business models.info:eu-repo/semantics/draf

Obtaining best value for money in RES auctions: a capacity-based with an embedded menu of contracts approach

As the impact of RES on energy markets has become more noticeable, the appropriate design of support schemes has gained in importance. Capacity-based support schemes are known to avoid market distortions. However, these schemes present two relevant limitations: (i) they may lead to the installation of RES capacity whose energy output value can be low, and (ii) defining the quantity to be supported is challenging, for RES targets are usually expressed as a minimum RES energy production. This paper proposes a capacity-based RES support scheme aimed at overcoming the previous limitations, therefore: (i) minimizing market distortions, (ii) maximizing the value of green energy outputs and (iii) allowing the regulator to meet green energy targets. The key feature is a bonus payment that depends on the operational profits earned by RES generators. This bonus payment is defined through a menu of contracts. The incentive properties are illustrated with a case study.info:eu-repo/semantics/draf

Smart grid replication : handbook for India

India has embarked on an ambitious sustainable development pathway by applying a multipronged approach spanning several sectors from developing smart cities to enabling electric vehicles. In the power sector, it is necessary to transform and prepare the grid at both the transmission and distribution levels to ensure the success of India’s sustainability journey. Implementation of innovative smart grid projects will enable India to reach its ambitious sustainability goals. However, a multitude of challenges in rolling out these novel solutions on a nationwide scale continue to persist. The handbook contains insights and tools that will aid implementation and replication of innovative smart grid projects in India. Therefore, this handbook provides its readers with the following: Insights into opportunities and barriers in replicating smart grid projects in India; A framework for selecting use cases based on their relevance to India; The CBA tool to assess the costs and benefits of smart grid use cases in India; The SRA tool to assess the scalability and replicability of smart grid use cases in India; Insights from applying the abovementioned tools to both European and Indian case studies

A Novel Methodology for the Scalability Analysis of ICT Systems for Smart Grids Based on SGAM: The InteGrid Project Approach

Information and Communication Technology (ICT) infrastructures are at the heart of emerging Smart Grid scenarios with high penetration of Distributed Energy Resources (DER). The scalability of such ICT infrastructures is a key factor for the large scale deployment of the aforementioned Smart Grid solutions, which could not be ensured by small-scale pilot demonstrations. This paper presents a novel methodology that has been developed in the scope of the H2020 project InteGrid, which enables the scalability analysis of ICT infrastructures for Smart Grids. It is based on the Smart Grid Architecture Model (SGAM) framework, which enables a standardized and replicable approach. This approach consists of two consecutive steps: a qualitative analysis that aims at identifying potential bottlenecks in an ICT infrastructure; and a quantitative analysis of the identified critical links under stress conditions by means of simulations with the aim of evaluating their operational limits. In this work the proposed methodology is applied to a cluster of solutions demonstrated in the InteGrid Slovenian pilot. This pilot consists of a Large Customer Commercial Virtual Power Plant (VPP) that provides flexibility in medium voltage for tertiary reserve and a Traffic Light System (TLS) to validate such flexibility offers. This approach creates an indirect Transmission System Operator (TSO)—Distribution System Operator (DSO) coordination scheme