The Development of Distributed Generation Scheepers …...The Development of Distributed Generation...
Transcript of The Development of Distributed Generation Scheepers …...The Development of Distributed Generation...
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The Development of Distributed GenerationMartin Scheepers
ECN Policy Studies
Int. Conf. ‘Energy in Changing Environment’, 13-14-15 December, 2007, Jacobs University Bremen
Contents
• What is distributed generation (DG)?• The policy drivers• Integration of DG in the network system• Effect of a large penetration of DG on the
regulated operators of electricity distribution networks
• Impact of a large penetration of DG and electricity from renewable energy sources (RES) on the total electricity system costs and costs for society
What is distributed generation (DG)?
• Medium and small hydro• Onshore wind• Tidal energy• Biomass and waste
incineration/gasification• Solar energy (PV)
• Medium district heating• Medium industrial CHP• Commercial CHP• Micro CHP
Distributed Generation (DG)
• Large hydro**• Offshore wind• Co-firing biomass in coal
power plants• Geothermal energy
• Large district heating*• Large industrial CHP*
Large-scale generation
Renewable Energy Sources (RES)
Combined Heat and Power (CHP)
* typical > 50 MWe** typical > 10 MWe
Market presence of DG in EuropeSource:DG-GRID / SOLID-DER
0
5
10
15
20
25
30
35
40
Austria
Belgium
Denmark
Finlan
dFran
ceGerm
any
Greece
Irelan
dIta
lyLu
xembu
rgNeth
erlan
dsPort
ugal
Spain
Sweden UK
Bulgari
a
Czech
Rep
ublic
Estonia
Hunga
ryLa
tvia
Lithu
ania
Poland
Roman
iaSlov
akia
Sloven
ia
DER
sha
re in
tota
l ele
ctric
ity c
apac
ity (%
)
RES CHP DG total
The policy drivers
• Climate Change- 20% or 30% lower GHG emissions in 2020 compared to
1990• Renewable energy sources (RES)
- 20% RES in final energy consumption in 2020- 40% to 60% RES in electricity mix in 2020
• Energy efficiency- 20% more energy efficient in 2020- More CHP
• Energy Security- Reduction of gas and oil import dependency- Secured reliable electricity supply
• Market liberalization- Electricity directive: integration of DG in network
system
Integration of DG in network system
• Electricity Directive Art. 14/7- When planning the development of the distribution
network, energy efficiency/demand-side management measures and/or distributed generation that might supplant the need to upgrade or replace electricity capacity shall be considered by the distribution system operator
DSO
Consumers
Equipment
TSO
Large power producers
• Connection charges• Use of System charges(Transport + system services)
DG-operators
• Connection charges• Use of System charges(Transport + system services)
• Equipment procurement• Operating & maintenance
• Transport services• Ancillary services
Energy loss compensation
profit
Regulator
Incentive regulation: • revenue cap • price cap
Distribution grid
Effect of a large DG penetration on operational and capital expenditures (I)• Problems to solve
- DG in rural networks causes voltage rise problems. - DG in urban networks causes fault level increase.
• Reinforcement costs- At low DG penetration levels reinforcement costs are zero, but
they will increase progressively with higher DG penetration. - Also “DG-density” causes cost increases.
• Energy losses- DG may initially reduce energy losses, but with higher DG
penetration losses will increase.• Distribution asset replacement value
- DG may reduce power flows through high voltage T&D network assets and possibly postpone network reinforcements. This benefit reduces in case of high DG penetration and high “DG-density”.
DSO
Consumers
Equipment
TSO
Large power producers
• Connection charges• Use of System charges(Transport + system services)
DG-operators
• Connection charges• Use of System charges(Transport + system services)
• Equipment procurement• Operating & maintenance
• Transport services• Ancillary services
Energy loss compensation
profit
Regulator
Incentive regulation: • revenue cap • price cap
Distribution grid
DSO
Consumers
Equipment
TSO
• Connection charges• Use of System charges(Transport + system services)
DG-operators
• Connection charges• Use of System charges(Transport + system services)
• Equipment procurement• Operating & maintenance
• Transport services• Ancillary services
profit
Regulator
Incentive regulation: • revenue cap • price cap
SmartDistribution grid
(Active Network Management)
• Energy loss compensation• Ancillary services
Effect of a large DG penetration on operational and capital expenditures (II)• Active network management
- Reinforcement costs can be reduced with “active network management”. However, in some high DG-penetration cases costs will be higher than passive network management.
- Operational costs (i.e. energy losses, curtailment compensation,labour costs) will increase. This results in higher total costs in some cases.
Neutralizing negative effect on the DSOs revenues (I)• Extra DSO expenditures
- DG may induce extra operational and capital expenditures• DSOs should not be compensated through DG
connection charges- to guarantee non-discriminatory network access DG connection
charges should be based on shallow costs (i.e. direct costs of the connection)
• DG-integration costs should be socialized - DG-integration costs socialized among consumers and DG
operators through Use of System charges- Use of System charges should be cost reflective- Preferably differentiated by location and time of use- Should be positive (if network costs are increased due to DG
operation) or might also be negative (if the network savings aregreater than the costs)
Neutralizing negative effect on the DSOs revenues (II)
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
R R U U R R U U R R R R U U U U R R R R U U U U R R U U R R U U
P A P A P A P A P A P A P A P A P A P A P A P A P A P A P A P A
Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes No No Yes Yes No No Yes Yes No No Yes Yes No No No No No No No No
Low Low Low Low High High High High Low Low Low Low Low Low Low Low High High High High High High High High Low Low Low Low High High High High
11% 11% 11% 11% 23% 23% 23% 23% 23% 23% 23% 23% 23% 23% 23% 23% 46% 46% 46% 46% 46% 46% 46% 46% 46% 46% 46% 46% 91% 91% 91% 91%
50 50 50 50 100 100 100 100 50 50 100 100 50 50 100 100 100 100 200 200 100 100 200 200 100 100 100 100 200 200 200 200
Incr
emen
tal n
et p
rofit
/regu
late
d pr
ofit
Impact with compensation Impact without compensation
Network type
Network management
Intermittency
Concentration
DG penetration (%)
DG penetration (MW)
Impact DG on DSO revenuewithout regulatory improvements
with regulatory improvements
Impact of a large DG penetration on the total electricity system costs and society
• Power generation costs- Electricity from RES still more expensive- Intermittent RES (e.g. wind) causes higher balancing costs
• Network costs- Higher network costs
• Costs for society- Electricity prices (commodity prices + network tariffs)- Financing support schemes for RES/CHP
Support MechanismSupport
Mechanism Power MarketPower Market
TSOBalancing
TSOBalancing
GridGrid
DG/RES-EDG/RES-E
ConsumersConsumers
network tariffs
productionsubsidy or feed-in tariff
electricity market price
network tariffselectricity end-user price
Funding through TSO or tax system
Funding through TSO or tax system
TSOAncillary services
TSOAncillary services
Support MechanismSupport
Mechanism Power MarketPower Market
TSOBalancing
TSOBalancing
GridGrid
DG/RES-EDG/RES-E
ConsumersConsumers
network tariffs
productionsubsidy or feed-in tariff
electricity market price
network tariffselectricity end-user price
Funding through TSO or tax system
Funding through TSO or tax system
Large budget increase
Impact on grid costs
Impact on market prices
Impact on balancing costs
TSOAncillary services
TSOAncillary services
Evolution of total system costs
RES-E/DG penetration over time (%)
Cos
ts
Generation costs
incl. external benefits
0
Generation costs, incl. balancing
Evolution of total system costs
RES-E/DG penetration over time (%)
Cos
ts
Generation costs
incl. external benefits
Network integration
costs
Innovative network
integration
0
Generation costs, incl. balancing
Evolution of total system costs
RES-E/DG penetration over time (%)
Cos
ts
Generation costs
incl. external benefits
Network integration
costs
Overall costsincl.
externalities
Overall costsincl.
innovations
Innovative network
integration
0
Generation costs, incl. balancing
Summary and conclusion
• In future a large share of power generation will come from DG and RES.
• The technical and economical impacts should be considered.• Besides a ‘smart’ technical integration also a ‘smart’ economical
integration of DG and RES is necessary.• This requires adaptation of the regulatory framework and market
design • The overall costs of a electricity supply system with a high share of
DG/RES may increase.
Acknowledgements and further information
http://www.solid-der.org/
http://www.dg-grid.org/
http://www.improgres.org/Thank you