Distributed Generation Storage, Demand Response, and Energy Efficiency as Alternatives to Grid Capacity Enhancement

The need for investment in capital intensive electricity networks is on the rise in many countries. A major advantage of distributed resources is their potential for deferring investments in distribution network capacity. However, utilizing the full benefits of these resources requires addressing several technical, economic and regulatory challenges. A significant barrier pertains to the lack of an efficient market mechanism that enables this concept and also is consistent with business model of distribution companies under an unbundled power sector paradigm. This paper proposes a market-oriented approach termed as “contract for deferral scheme” (CDS). The scheme outlines how an economically efficient portfolio of distributed generation, storage, demand response and energy efficiency can be integrated as network resources to reduce the need for grid capacity and defer demand driven network investments.

[1]  Peter J. G. Pearson,et al.  The role of large scale storage in a GB low carbon energy future: Issues and policy challenges , 2011 .

[2]  Philip Vogel,et al.  Efficient investment signals for distributed generation , 2009 .

[3]  G. Baiocchi,et al.  Modeling of financial incentives for investments in energy storage systems that promote the large-scale integration of wind energy , 2013 .

[4]  David M Newbery,et al.  Network capacity auctions: promise and problems , 2003 .

[5]  Tooraj Jamasb,et al.  The Future of Electricity Demand : customers, citizens and loads , 2011 .

[6]  Axel Ockenfels,et al.  Economics and Design of Capacity Markets for the Power Sector , 2012, Zeitschrift für Energiewirtschaft.

[7]  A. Piccolo,et al.  Exploring the Tradeoffs Between Incentives for Distributed Generation Developers and DNOs , 2007, IEEE Transactions on Power Systems.

[8]  Furong Li,et al.  Evaluation of investment deferral resulting from microgeneration for EHV distribution networks , 2010, IEEE PES General Meeting.

[9]  Peter Cappers,et al.  An assessment of the role mass market demand response could play in contributing to the management of variable generation integration issues , 2012 .

[10]  Zita Vale,et al.  Distributed energy resource short-term scheduling using Signaled Particle Swarm Optimization , 2012 .

[11]  Paul R. Milgrom,et al.  Putting Auction Theory to Work: Uniform Price Auctions , 2004 .

[12]  T. Jamasb,et al.  Electricity Distribution Networks: Investment and Regulation, and Uncertain Demand , 2011 .

[13]  N. M. Fehr,et al.  Modeling Electricity Auctions , 2002 .

[14]  Tooraj Jamasb,et al.  Long-term Framework for Electricity Distribution Access Charges , 2005 .

[15]  G. Joós,et al.  On the Quantification of the Network Capacity Deferral Value of Distributed Generation , 2006, IEEE Transactions on Power Systems.

[16]  Marjolein van Werven,et al.  The changing role of distribution system operators in liberalised and decentralising electricity markets , 2005, 2005 International Conference on Future Power Systems.

[17]  Matias Herrera Dappe.  Sequential Uniform Price Auctions , 2013 .

[18]  Tao Xu,et al.  Electrical Power and Energy Systems , 2015 .

[19]  Luis F. Ochoa,et al.  Distributed generation and security of supply: Assessing the investment deferral , 2009, 2009 IEEE Bucharest PowerTech.

[20]  Haozhong Cheng,et al.  Technical and economic impacts of active management on distribution network , 2009 .

[21]  Michael Kurrat,et al.  Efficient integration of distributed generation for meeting the increased load demand , 2011 .

[22]  Tooraj Jamasb,et al.  Smart Grids and Energy Trilemma of Affordability, Reliability and Sustainability: The Inevitable Paradigm Shift in Power Sector , 2012 .

[23]  F. Li,et al.  Costs and benefits assessment considering deferral of assets expansion in distribution systems , 2007, 2007 42nd International Universities Power Engineering Conference.

[24]  C. Jenkins,et al.  Energy efficiency as a resource in the ISO New England Forward Capacity Market , 2011 .

[25]  Thomas E. Hoff,et al.  Distributed generation: An alternative to electric utility investments in system capacity , 1996 .

[26]  Erik Eduardo Rego.  Reserve price: Lessons learned from Brazilian electricity procurement auctions , 2013 .

[27]  Tomás Gómez,et al.  Impact of distributed generation on distribution investment deferral , 2006 .

[28]  M. Parsa Moghaddam,et al.  An investigation on the impacts of regulatory support schemes on distributed energy resource expansion planning , 2013 .

[29]  Rafael Cossent,et al.  Distribution planning with reliability options for distributed generation , 2010 .

[30]  Luiz Augusto Barroso,et al.  Electricity Auctions: An Overview of Efficient Practices , 2011 .

[31]  A. Piccolo,et al.  Evaluating the Impact of Network Investment Deferral on Distributed Generation Expansion , 2009, IEEE Transactions on Power Systems.

[32]  Xiaoyan Zou,et al.  Double-sided auction mechanism design in electricity based on maximizing social welfare , 2009 .

[33]  A. Schroeder.  Modeling storage and demand management in power distribution grids , 2011 .

[34]  Jaap Gordijn,et al.  Business models for distributed generation in a liberalized market environment , 2007 .

[35]  Meg Gottstein.  The Role of Forward Capacity Markets in Increasing Demand-Side and Other Low-Carbon Resources: Experience and Prospects , 2010 .