Electricity production - Distributed generation

Distributed generation (DG) covers a myriad of technologies and applications, defined by three parameters: the voltage level at which the system is connected to the network; the controllability of supply; and the distance to the end-user. 

Distributed generation is connected to the distribution network (usually at voltage levels of 110 kV or lower). The supply from some of these sources is controllable, such as some CHP plants, but generation from others is difficult to adjust to demand (e.g. small wind  and hydro power). Distributed generation, unlike centralized generation, is generally sited close to users, which often consume a share of the produced energy themselves.

For sustainability (EU ’20-20-20’ goals) and security of supply reasons, the share of renewable energy in the generation mix must increase significantly. It is expected  that renewable systems at the distribution level will contribute significantly towards these goals.

However, integrating the growing number of distributed generation sources into existing electricity networks and markets in a technically sound and cost-effective way is challenging, mainly because of the following two reasons:

• Power flows in low voltage networks can become difficult to predict and control as many intermittent distributed installations feed into the system. At times of excess local power generation, power needs to be transferred from the distribution to the transmission networks. Power flows in distribution networks need to become bidirectional to enable this, and connections between regions must be strengthened.
• With increasing connection of distributed generation, a range of extreme network flow conditions will become more frequent, but many will occur only rarely. Thus, preparing networks for all different situations becomes complex and expensive.

Role for ECN Policy Studies

ECN Policy Studies  has analysed these challenges in a range of high quality studies in various European and national projects. Our work has primarily addressed three aspects of the integration of distributed generation:

• Network and market innovation – assessing the impact of distributed generation on electricity networks, and the economic potential for applying new network and market management concepts, like smart grids and virtual power plants.
• Network planning and charging – evaluating the role and character of regulatory incentives for proper network investment and operation to accommodate the growth of distributed generation, for example through innovative tariff systems.
• Business cases – analysing the business case for utilities and network operators for distributed generation and the new management concepts, and the economic effects on end-users.

Partners or Stakeholders

Comillas University (Spain), Imperial College (UK), DTU-RISOE (Denmark), Labein-Tecnalia (Spain), Dena (Germany), EEG (Austria), VTT (Finland), Union Fenosa (Spain), Alliander (Netherlands), MVV Energie (Germany), Energiened (Netherlands).

More information

The following projects are related to this subject:

• IMPROGRES
  Improvement of the Social Optimal Outcome of Market Integration of
  DG/RES in European Electricity Markets
• FENIX
  Flexible Electricity Networks to Integrate the eXpected ‘energy evolution’
• RESPOND
  Renewable Electricity Supply interactions with conventional POwer
  generation, Networks and Demand
• SOLID-DER
  A Coordinated Action towards the promotion and consolidation of all RTD activities for large-scale integration of DER in the electricity market
• DG-Grid
  Analysis of the impact of DG on electricity distribution networks
• Dispower
  Distributed Generation with High Penetration of Renewable Energy Sources
• Sustelnet
  Policy and Regulatory Roadmaps for the Integration of Distributed Generation and the Development of Sustainable Electricity Networks

The following publications are available:

• Market and regulatory incentives for cost efficient integration of DG in the electricity system, May 2010.
  Final report of the IMPROGRES proejct on the improvement of market and network conditions for integration of Distributed Generation.
• Fenix deliverable 3.3: Financial and socio-economic impacts of embracing the Fenix concept, October 2009.
  Assessment of the economic viability of the FENIX concept.
• Regulatory road maps for the optimal integration of intermittent RES-E/DG in electricity systems, August 2009.
  Final report of the RESPOND project on the development of regulatory road maps for optimal integration of large shares of intermittent RES/DG sources.
• Regulatory Improvements for Effective Integration of Distributed Generation into Electricity Distribution Networks, November 2007.
  Final report of the DG-GRID project on the enhancement of distributed generation integration through the imporvement of the regulatory framework for distributed network.
• The Changing Role of Energy Suppliers and Distribution System Operators in the Deployment of Distributed Generation in Liberalised Electricity Markets. DISPOWER project, June 2005.
  Assessment of new opportunities for distribution system operators (DSOs) and energy suppliers to adapt to and strengthen the increasing penetration of distributed generation.

For more information please contact Sytze Dijkstra.