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Distributed Generation: Opportunities for Distribution Network Operators, Wider Society and Generators

Author

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  • Karim L. Anaya
  • Michael G. Pollitt

Abstract

This study explores and quantifies the benefits of connecting more distributed generation (with and without the use of smart connections) across different parties (Distribution Network Operators, wider society and generators). Different connection scenarios are proposed (with partial and full interruptible capacity quota, a mix of generation and different technology-specific curtailment levels) for integrating DG units in the constrained area of the March grid (East of England). This constitutes the trial area of the Flexible Plug and Play project, which is being implemented by UK Power Networks. The smart connection option is by far the preferred option across all the scenarios (higher NPV/MW). However, for some generators the results are very sensitive to the discount rate used (i.e. solar PV). The analysis of the distribution of benefits suggests that generators capture most of the benefits while DNOs and wider society capture much less benefit. A smart connection incentive, which recreates the benefits to DNOs from an earlier losses incentive, is proposed. In contrast with other societally desirable metrics which are usually incentivised or penalised, there is currently no direct connection between more DG MWs connected and DNO incentive payments. Our proposed smart connection incentive, by charging DG for smarter connection may help to distribute more efficiently the benefits for connecting more DG.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Karim L. Anaya & Michael G. Pollitt, 2015. "Distributed Generation: Opportunities for Distribution Network Operators, Wider Society and Generators," Working Papers EPRG 1510, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
  • Handle: RePEc:enp:wpaper:eprg1510
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    Citations

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    Cited by:

    1. Faerber, Laura Antonia & Balta-Ozkan, Nazmiye & Connor, Peter M., 2018. "Innovative network pricing to support the transition to a smart grid in a low-carbon economy," Energy Policy, Elsevier, vol. 116(C), pages 210-219.
    2. Helbert Eduardo Espitia & Iván Machón-González & Hilario López-García & Guzmán Díaz, 2019. "Proposal of an Adaptive Neurofuzzy System to Control Flow Power in Distributed Generation Systems," Complexity, Hindawi, vol. 2019, pages 1-16, March.

    More about this item

    Keywords

    distributed generation; renewable energy; smart solutions; cost benefit analysis; smart connection incentive;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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