Investment Deferral Research Articles

A methodology for preliminary benefit evaluation of Distributed Generation to drive private investments

Private investments in distributed generation (DG) are typically driven by the interests of private investor, often overlooking possible benefits for the distribution operator. This work presents a methodology that enables power distribution utilities to assess the potential for attracting investments in their networks, considering a regulatory framework where utilities could actively encourage private DG investors. The methodology involves calculating and integrating the benefits associated with investment deferral, losses reduction and reliability improvement into the energy price negotiated between the utility and the DG owner. The proposed approach was applied to an adapted test grid, considering real regulatory aspects related to technical losses and reliability. The results provide support for utilities to perform preliminary financial analyses to determine the appropriate incentives for private DG investors, identifying cases with competitive energy prices for generators. Key contributions of this methodology include a clear and reasonable metric for quantifying the capacity to attract investments based on standard utility data and the importance of incorporating regulatory aspects related to technical losses and reliability, that are often neglected in similar studies. Furthermore, the methodology not only promotes new opportunities for DG investors but also addresses challenges associated with network congestion.

Electric sector modernization in Brazil: Milestones, challenges, and prospects

Since Brazil's first specific distributed generation (DG) resolution (Regulatory Resolution No. 428/2012), the installed capacity has grown extensively, reaching nearly 25 GWp in Nov/2023. As long as DG is smartly deployed, it provides several benefits to the electrical grid and society, such as energy loss reduction, investment deferral, mitigation of environmental impacts, job creation, and economic development. However, it also implies drawbacks such as tariff raises, which can be significantly harmful in the long term. Therefore, aiming to ensure balanced and fair regulatory frameworks for all market agents, Brazil is undergoing a transition process in which the incentives for deploying DG are moderately reduced. This transition process requires critical discussions concerning the effectiveness of the implemented changes, the tendencies of the sector, and how to improve future regulation. In this context, this paper provides an in-depth review of regulatory aspects associated with DG and the modernization of the electric sector, including historical milestones (e.g., normative resolutions, public consultations, and laws), challenges, regulatory models, market liberalization issues, uptake of other distributed energy resources, and prospects. Moreover, although Brazil is the focus of the study, the status of other countries is also discussed for enhanced contextualization. Hence, the paper might be useful for researchers, government institutions, and policymakers.

A practical methodology for distributed energy resources (DER) valuation in distribution networks

Under most NEM policies, DER customers sell excess electricity at full retail price. Although this structure helped the widespread growth of DER, it is argued to subsidize DER at the expense of non-DER customers. In that regard, value-based compensation emerged, and as of 2022, at least 12 states have conducted studies to investigate alternative NEM compensation methods to inform new policy decisions. DER can provide various benefits to the distribution system, including energy, reliability, resilience, environmental, societal, and investment deferral. Each benefit has an individual value, and calculating these values is challenging. This paper presents a practical methodology to calculate the DER location value. The proposed approach utilizes established utility planning and reliability criteria. It analyzes the distribution system's current status, capturing any planning or reliability criteria violations, and determines the utility upgrade investment costs to remediate them. The proposed approach then determines the size, locational, and temporal profile of the DER that can be added to the distribution network and defer any of the utility upgrade investment costs, thus obtaining the value to the system and assigning a monetary value. The results provide a nodal distribution value of DER to the distribution system.

How Hospitality Entrepreneurs Change Business Practices Under COVID-19 Pandemic: A Case Study of Small and Medium Sized Entrepreneurs at Lower Northeastern Thailand

Purpose: The purpose of this study is to examine the adaption methods of hospitality entrepreneurs during the Covid-19 pandemic and the influenced variables for business adaptations. Theoretical framework: This study was fundamentally based on the theory of entrepreneurial bricolage behavior which find to understand the entrepreneurs do during the resource constraints due to the covid-19 pandemic. Design/Methodology/Approach: The quantitative study is using questionnaires as a tool. The methods of adaptation for innovative hospitality management used by small and medium size hospitality entrepreneurs in Lower Northeastern Thailand. The sample population included 360 individuals with 55% females and 45 % males. Most of the participants were owners (89%) of small hotels and guesthouses some with restaurants and other hospitality facilities such as spas and coffee shops. Finding: An entrepreneurial adaptation of cost reductions in terms of facilities and personnel, as well as renegotiation with all stake holders including the government, that assisted far less in developing economies (EMDEs) and emerging markets then in European countries. Research, practical and social implications: The methods discussed in the paper includes: adjustment in investment deferral; adjustment in effective cost reduction; reduce operating costs; management inventory downsizing; concentrate on innovation; negotiating the terms of various contracts; adjustment in getting help from the government and concentrate on activities that generate income for business. Originality/Value: The value of the study is the adaptation is something constructed or created from a diverse range of available things. It introduces the information for small and medium size hospitality business adaptation during the crisis which effects the business operations. Most of the entrepreneurs will apply the adaptational variables for business sustainability and improve business performance.

Truncated Strategy Based Dynamic Network Pricing for Energy Storage

With the increasing penetration of local renewable energy and flexible demand, the system demand is more unpredictable and causes network overloading, resulting in costly system investment. Although the energy storage (ES) helps reduce the system peak power flow, the incentive for ES operation is not sufficient to reflect its value on the system investment deferral resulting from its operation. This paper designs a dynamic pricing signal for ES based on the truncated strategy under robust operation corresponding to the network charge reduction. Firstly, the operation strategy is designed for ES to reduce the total network investment cost considering the uncertainties of flexible load and renewable energy. These nodal uncertainties are converted into branch power flow uncertainties by the cumulant and Gram-Charlier expansion strategy. Then, a time of use (ToU) pricing scheme is designed to guide the ES operation reflecting its impact on network investment based on the long-run investment cost (LRIC) pricing scheme. The proposed ToU LRIC method allocates the investment costs averagely to network users over the potential curtailment periods, which connects the ES operation with network investment. The curtailment amount and the distribution of power flow are assessed by the truncated strategy considering the impact of uncertainties. As demonstrated in a Grid Supply Point (GSP) distribution network in the UK, the network charges at the peak time reduce more than 20% with ES operation. The proposed method is cost-reflective and ensures the fairness and efficiency of the pricing signal for ES.

Impact of grid-scale energy storage systems on energy and frequency regulation Colombian markets

This article proposes a co-optimization model that allows evaluating the simultaneous participation of energy storage systems (ESS) in arbitrage applications, secondary frequency regulation, and transmission investment deferral. The model considers the ESS degradation through an upper-piecewise linear approximation; constraints related to primary frequency energy reserve are also included in the model. The formulation is evaluated using historical data from the Colombian wholesale energy market. Eight case studies corresponding to the possible combinations of ESS participation in the three applications are analyzed. Subsequently, a financial evaluation is carried out for each case study, both from the system and the investor's point of view. The results show that the exclusive use of ESS to provide arbitrage is not economically viable in Colombia, while simultaneously providing secondary frequency regulation and restriction relief services is profitable, both for the system and for an investor agent.

Strategic integration of photovoltaic, battery energy storage and switchable capacitor for multi-objective optimization of low voltage electricity grid: Assessing grid benefits

Battery energy storage system has become an inevitable element in smart distribution network due to massive deployment of community level distributed photovoltaic power generation system. The battery energy storage system not only participates in the backup power supply but also have the potential to provide numerous distributed ancillary services. In this paper, Slime mold optimization algorithm is applied to optimally allocate the photovoltaic generation units, battery energy storage systems and switchable shunt capacitor banks in distribution network while minimizing the two objective functions i.e., active power loss of distribution system and annualized capital cost of integrated equipments (photovoltaic units, battery energy storage systems and shunt capacitors) simultaneously. The proposed optimization framework is implemented on an IEEE 33 bus distribution network for different cases and compared with Non-dominated Sorting Genetic Algorithm II. The comparison of simulation results for different cases reveals the promising advantages in various technical and economic issues along with an additional benefit of investment deferral for distribution feeder up-gradation up to a significant span of years.

Impacts of the Inclusion of Distributed Generation on Congestion of Distribution Networks and in the Islanding Operation Capability

The growing demand for electricity in the world has led to power systems having to constantly increase their generation capacity and expand their transmission and distribution systems. Consequently, distributed generation has positioned as a technology able to integrate generation close to consumption centers, freeing up capacity in the transport systems, which can be translated into a deferral of investments in network expansion. Therefore, this paper analyzes the impact of the inclusion of distributed generation in the congestion of a typical distribution network and evaluates the potential of providing the island operation capability ancillary service in a section of the system to identify the possible challenges and benefits that the development of this technical support service could have in typical Colombian distribution networks.

Expert survey on Energy Storage Systems: Regulation and policy from an Indian power sector perspective

A survey of Indian power-sector stakeholders on the subject of Energy Storage System (ESS) policy and regulatory issues is presented. The survey is divided into four sub-themes: the need for ESSs; ESSs in a network context; ESSs in the market; and ESSs in innovation. Respondents support the need for dedicated ESS regulation, including a definition of ESSs. In terms of networks, respondents support unrestricted ownership, and the development of dedicated grid connection standards and the provision of ancillary services for the network by ESSs; this would allow their participation in wholesale energy markets. However, opinions diverge on the level of ESS regulatory oversight needed for grid investment deferral. As far as power markets are concerned, respondents agree on the need for updating bidding formats, special treatment for ESSs regarding grid access charges to eliminate market entry barriers and to incentivise the operational versatility of ESSs. However, opinions diverge on the appropriate compensation mechanism to be applied for services provided by ESSs. There is an agreement on supporting innovative ideas such as P-to-everything (P2X) conversion and the use of regulatory sandboxes for enabling ESS.

The greenhouse gas emissions’ footprint and net energy ratio of utility-scale electro-chemical energy storage systems

Electro-chemical batteries are widely used in portable devices and transportation, but they can also be used in the electricity grid for various applications. The assessment of the environmental impacts of electro-chemical storage systems for stationary use has received little attention. In this study, data-intensive, bottom-up life cycle assessment models were developed to assess the life cycle net energy ratios (NERs) and greenhouse gas (GHG) emissions of utility-scale stationary applications of five electro-chemical energy storage systems: sodium-sulfur, lithium-ion, valve-regulated lead-acid, nickel–cadmium, and vanadium redox flow. Four stationary application scenarios were considered: bulk energy storage, transmission and distribution (T&D) investment deferral, frequency regulation, and support of voltage regulation. The Li-ion storage system has the highest NER and lowest GHG emissions in every scenario. The life cycle GHG emissions range from 715 to 784 kg-CO2eq for sodium-sulfur, 625–659 kg-CO2eq for lithium-ion, 749–803 kg-CO2eq for valve-regulated lead-acid, 742–806 kg-CO2eq for nickel–cadmium, and 800–963 kg-CO2eq for vanadium redox flow per MWh of electricity delivered, depending on the application scenario. The results are highly influenced by the operation phase that involves charging the batteries. Lithium-ion and sodium-sulfur storage systems are the most suitable for all the application scenarios because of their longer cycle lives and higher energy densities.

Technology Focus: Deepwater Fields (May 2021)

I cannot overstate that 2020 was one of the toughest years on our industry’s ecosystem. The huge scale of the crisis wreaked by the COVID-19 pandemic has affected us all in such an unprecedented way and added a hard-hitting dimension to our industry’s fragile outlook. The prolonged periods of lockdown and the hiatus mandated in several countries, including some of the high-consuming ones, resulted in the largest oil glut ever, which exacerbated the economics severely. The flat oil-supply curve erased almost all the growth of the last decade and has put our endurance, agility, and resilience to a hard test. The offshore segment, from which approximately 33% of global oil production comes, was confronted by this turmoil, and escalating challenges surrounded the viability and sustainability of deepwater developments like never before. Unlike previous downturns experienced by our industry, the record plunge in oil demand has put the effectiveness of previous measures of recovery, such as deferral of investments or waiting for an upturn in oil prices, under the microscope. As the headwinds of the pandemic continue reshaping the global economy, our industry, and the deepwater segment in particular, have no time to lose to rock the boat and upend assumptions in the post-COVID-19 world. Imminent substantive changes within the industry are inevitable to reduce uncertainty and risk and to prepare for the new decade and beyond of delivery in light of the rapid evolution of renewables. Major deepwater operators have made remarkable achievements in lowering the average breakeven price to around $50 per barrel from around $70 per barrel in the past 5 years. Increasing cost savings are vital, and innovative money-saving engineering notions are an essential tactic to achieve a lower breakeven price. Additional proportionate, strategic, and reinventive initiatives are needed for the deepwater sector to adapt to the new energy landscape and search for new areas of growth. They will govern the future of the sector and differentiate the pioneers from followers. I am in no doubt that redefining fundamental strategies toward the development of partnerships in joint deepwater projects, embracing cutting-edge fit-for-purpose and cross technologies, and prioritizing net-zero emissions are keys to unlocking transformational gains and leveraging the opportunity to promote a sustainable future for the deepwater sector. Recommended additional reading at OnePetro: www.onepetro.org. SPE 200522 - A Novel Deepwater Kick-Control Strategy for Handling Riser Gas Unloading With Data-Driven Parameter Estimation by Qifan Gu, The University of Texas at Austin, et al. SPE 200429 - Investigation of Permeability Impairment Caused by Asphaltene Precipitation During Gas-Injection EOR in a Major Gulf of Mexico Field by M.R. Fassihi, BHP, et al. SPE 202296 - Analyzing Critical Elements in Openhole Gravel-Pack-Treatment Design Cycle: Case Study in Indian Ultradeep Water by Vaibhav Gupta, Schlumberger, et al.

Investigating distribution systems impacts with clustered technology penetration and customer load patterns

Electric vehicles (EVs), photovoltaics, heat pumps and energy storage are changing the demands placed on electricity systems and can pose significant challenges for system operators and distribution companies. Furthermore, clustering of behaviours and technologies throughout different areas of distribution systems can produce broad variation in load curves and impacts on the network. This paper investigates local clustering impacts in a utility service area as a case study to develop methods and gain insights which can be applied to other datasets. Through clustering the variation in technology penetration rates across distribution transformers is revealed, a level of granular variability which has not been well-quantified in past literature. A second clustering framework is the applied to transformer load profiles to identify a small but diversely representative set of novel archetypical local loads. These profiles provide a summary of the dataset variability, showing how simple modeling can begin to illustrate the impacts of future technology penetration across different regions of the system. The results of the case study demonstrate that home EV charging will significantly increase peak residential transformer loading (up to 19% with 25% EV penetration), potentially drastically decreasing their useful life. Results also produced insights into possible mitigation strategies. By taking advantage of alternate charging opportunities (like workplace) the load can be spread across transformers, reducing growth in local residential and aggregate peaks by 2–8%. Energy storage is found to be more effective on residential transformers than business ones, promoting deferral of capacity investment, while simultaneously matching local and regional grid requirements for demand smoothing. In contrast, photovoltaics are found most effective at lowering new and baseline peak demands when on commercial and industrial transformers, particularly for small businesses where moderate penetration scenarios for EVs and PVs showed peak demand actually declining by 1–9%. The data analysis and clustering techniques developed through this case study can provide valuable insight into large datasets for policy development and potentially revelatory illustration of the varying effects of new technology within evolving networks.

The development of techno-economic models for the assessment of utility-scale electro-chemical battery storage systems

The decision to use a certain type of energy storage system for a stationary application depends largely on its economic performance. The electro-chemical energy storage systems are well known for transportation and portable applications. The evaluation of techno-economic feasibility of different electro-chemical energy storage systems for utility-scale stationary applications has received less attention. In this study, bottom-up techno-economic models were developed for five electro-chemical battery storage technologies: sodium-sulfur, lithium-ion, valve-regulated lead-acid, nickel–cadmium, and vanadium redox flow. Four stationary application scenarios – bulk energy storage, transmission and distribution investment deferral, frequency regulation, and support of voltage regulation – were assessed to evaluate the techno-economic feasibility. Life cycle costs were estimated for capacities of 5–100 MW for bulk energy storage, 5–25 MW for transmission and distribution investment deferral, 5–100 MW for frequency regulation, and 5–30 MW for support of voltage regulation. Sensitivity and uncertainty analyses were carried out to examine the extent to which the levelized cost of storage is affected by changes in input parameters. The base case results show that the levelized cost of storage are in the range of $199–$941/MWh for the sodium-sulfur, $180–$1032/MWh for the lithium-ion, $410–$1184/MWh for the valve-regulated lead-acid, $802–$1991/MWh for the nickel–cadmium, and $267–$3794/MWh for the vanadium redox flow, depending on the application scenario. The results also show that when the discharge duration increases, the levelized cost of storage decreases because of economies of scale. A vanadium redox flow battery is not economically suitable for frequency regulation and support of voltage regulation given its short discharge duration.

Business environment review 2020

The petroleum (oil, gas and LNG) business environment in 2020 was adverse. Two factors disrupted the foundations of the global oil and gas industry. First, the COVID-19 global pandemic caused an unprecedented reduction of demand that combined with high levels of production resulted in oversupply of oil, gas and LNG. This gap between supply and demand resulted in a collapse in commodity prices, reduced revenues and cancelling or deferral of investment. Second, societal awareness of the impact of climate change on planet Earth increased. Pressure to reduce carbon emissions and a concomitant societal-shift against carbon-emissions intensive petroleum-based forms of energy generation intensified. Many major players in the petroleum industry re-framed their strategies to focus on energy supply in general and in some cases plan to cease their exploration, development and production activities in the coming decades. In Australia, in part global factors manifested in the deferral of investment decisions on three LNG investments. The Australian Government signalled that gas developments would be a critical part of Australia’s post-COVID recovery and that management of abandonment and decommissioning liabilities would be a factor in the approval of transactions leading to a change in ownership. This paper will describe each of the factors faced by the industry in 2020 and frame the issues facing the petroleum industry in 2021 and beyond.

Expert Survey on Energy Storage Systems: regulation and policy from an Indian power sector perspective

A survey of Indian power-sector stakeholders on the subject of Energy Storage System (ESS) policy and regulatory issues is presented. The survey is divided into four sub-themes: the need for ESSs; ESSs in a network context; ESSs in the market; and ESSs in innovation. Respondents support the need for dedicated ESS regulation, including a definition of ESSs. In terms of networks, respondents support unrestricted ownership, and the development of dedicated grid connection standards and the provision of ancillary services for the network by ESSs; this would allow their participation in wholesale energy markets. However, opinions diverge on the level of ESS regulatory oversight needed for grid investment deferral. As far as power markets are concerned, respondents agree on the need for updating bidding formats, special treatment for ESSs regarding grid access charges to eliminate market entry barriers and to incentivise the operational versatility of ESSs. However, opinions diverge on the appropriate compensation mechanism to be applied for services provided by ESSs. There is an agreement on supporting innovative ideas such as P-to-everything (P2X) conversion and the use of regulatory sandboxes for enabling ESS.

Investment Deferral of Feeder Upgrades Revealed by System-Wide Unbalanced Dynamic Rating: Harvesting the Hidden Capacity of Distribution Systems Discovered by Thermal Map Technology

Dynamic thermal rating for underground cables with balanced phase currents has been extensively studied in the literature. Paradoxically, distribution feeders operate inherently unbalanced and no publications are available for unbalanced thermal rating. Because of the lack of technology, utilities operate with very conservative margins using the maximum of the three-phase currents to determine the line loading. This practice leads to the significant underutilization of underground cables. To fill the gap this paper presents a physically sound and accurate transient electro-thermal model of unbalanced three-phase distribution cables considering variations in the load and environment. Moreover, the model proposed in this paper allows harvesting the large hidden capacity of distribution systems trapped in the thermal inertia of underground cables. A convenient visual tool is developed to uncover hot spots and underutilized energy routes. This facilitates real-time network reconfiguration based on predicted load graphs and dynamic thermal conditions. The proposed model is also useful to study load growth, perhaps eliminating or deferring capital investments needed to upgrade the capacity of the existing underground feeders. The IEEE 37-bus distribution network is used as a case study. The results show that the proposed methodology has a high potential to defer investments, for instance, one could save $5M for a small system like the IEEE 37-bus distribution network which would have been necessary under current conservative practice.

An application of energy efficiency programs on multi-stage transmission network expansion and reactive power planning

Energy efficiency programs as an energy source with multiple advantages (low cost, more reliable and better clean) are considered as one of the most effective solutions to meet future energy needs. In this paper, energy efficiency programs are modelled as virtual sources of power generation to investigate their impacts on expanding transmission network and reactive power planning. A multi-stage model based on AC power flow has been used to indicate the possibility of postponing the investment actions as the investment deferral in transmission expansion problems. Two groups of regulatory support schemes are considered as investor income to promote participation in energy efficiency programs, namely purchasing certified emission reductions and shared saving model. In addition, two standard case studies (Garver & 46-bus Brazilian) are evaluated to demonstrate the promising potential of the proposed model in handling the planning problems of practical power systems. The simulation results show the effectiveness of the proposed model to solve such planning problems in the presence of energy efficiency programs.

Investment deferral by optimal utilizing vehicle to grid in solar powered active distribution networks

Abstract The load growth in the distribution grids is often handled by distribution network expansion planning. Significant part of such long-term expansion plan is required to supply on-peak load demand. The on-peak load demand may be supplied by supplementary technologies to reduce or defer network expansion. The vehicle to grid (V2G) is an efficient technology to cope with such situation. This paper presents distribution network expansion plan including electric vehicle charging station and solar panels. The V2G technology is modeled in the charging station operation. The purpose is to minimize the network expansion cost by smart V2G operation subject to solar energy uncertainty. The model is expressed in the form of optimization programming and minimize the expansion cost. The model optimizes the operation pattern of electric vehicles while considers all technical constraints. The outputs validate that the V2G operation in the charging station reduces the expansion cost by 450%. The developed model successfully shaves the peak load demand and deals with solar power fluctuations.

Wind-hydrogen storage in distribution network expansion planning considering investment deferral and uncertainty

With respect to the recent developments of hydrogen storage system (HSS), it is relevant to model these storage units in the network expansion planning. Also, most of the available expansion planning tools consider constant locations and sizing for renewable resources and only study the impacts of renewables on the model. It seems that considering variable location and capacity for renewable energies and finding their optimal levels may result in more flexible model. With regard to these issues, this paper presents distribution network expansion planning incorporating wind power and hydrogen storage. The optimal site and size of wind and hydrogen systems are denoted. The stochastic optimization programming is addressed to minimize the plan budgets. The purpose is to defer the investment and operating budgets. The uncertainty modeling is developed to handle the load-wind errors. The achievements demonstrate that the model finds optimal location, sizing, operation pattern, and setting for wind turbines and HSSs while the planning cost is deferred and minimized.

Optimal Wind DG Integration for Security Risk-Based Line Overload Enhancement: A Two Stage Approach

Line congestion margin is the available line capacity before the line becomes fully loaded. It is a quantity to measure the transmission lines security level. Placing of large scale distributed generation (DGs) units can be a key technique to alleviate line congestion, hence enhance the transmission line congestion margin, and grid security levels. However, the influence of DG integration on line congestion margin is effective at locations where transmission lines operate near to their maximum capacity. In addition, determining the required penetration level of DG (DG size) is crucial for maximizing the DG system support benefits in transmission system. A two stage approach is presented in this paper for optimal integration of large-scale wind DG for improving line congestion risk based on the congestion margin level. In stage one, a probabilistic approach is developed to predict lines with the highest probability to be congested considering the uncertainty of the line congestion margin. Once lines with a highest risk to be congested are determined at the end of the first stage, the result from stage one is employed to place DG at the node bus to which the predicted most congested line is delivering power. A Mixed Integer Linear Programing (MILP) optimization model is developed in the second stage to determine the optimal DG penetration level (DG size) for improving transmission line congestion margin considering transmission line investment deferral.