Abstract
This paper discusses the technical, regulatory and policy challenges inherent in planning and operating power systems with high penetrations of Distributed Energy Resources (DER): generators, flexible demand and energy storage connected within electricity distribution networks. Many liberalised electricity systems worldwide are seeing growth in DER including significant capacities of distributed renewable generation. The paper starts from the premise that optimal distribution networks are those that satisfy the objective of a lowest cost power system whilst meeting customers’ expectations of reliability and societal desire for sustainability. It highlights major challenges that policy makers face in respect of market and regulatory arrangements that support energy and flexibility provision from a large number of small, variable and often uncertain resources. These challenges include the need to respect the technical limits of the system and ensure its operability, development of well-designed mechanisms to support innovation, and an appropriate share of risk between market actors. A key contribution of the paper is to discuss the opportunities offered by more active distribution system operation as a substitute for capital investment and its regulatory and policy implications. Finally, the paper presents priorities for policy to facilitate a highly distributed electricity system.
Highlights
A decarbonised electricity sector serving the current demand for electrical energy but increased electrified heating, cooling and transport will be extremely important in achieving the sustainability objectives of energy policy at lowest cost
In order to ensure that the electricity system is able to support wider energy system objectives effectively, the way the system is planned, operated and regulated must be reviewed with policy makers establishing an adequate environment for investment and operational decision making by industry and individuals alike
The effects of increased distributed generators (DG) penetration on the distribution network itself include: more variable power flows within distribution networks and between distribution and transmission; the potential need for network upgrades to facilitate export from, as well as import to, the distribution network; and high voltage issues associated with distributed generation connected to low and medium voltage feeders (CIGRE, 2014)
Summary
A decarbonised electricity sector serving the current demand for electrical energy but increased electrified heating, cooling and transport will be extremely important in achieving the sustainability objectives of energy policy at lowest cost. This paper's contribution is to make an original use of both engineering knowledge and reflections on current regulatory arrangements from a number of international examples to highlight a range of issues associated with these challenges and some of the limited responses to them to date It reviews some of the fundamental aims that drive power system planning and development at different voltage levels and discusses various approaches that might support the efficient planning and operation of an electricity system with high DER penetrations together with the policy requirements needed to enable these. It presents a list of priorities for future systems aimed at attaining the optimal combination of DER, operational control and infrastructure investment and discusses the policy changes needed to achieve this
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