Summary:
Increasing DG/RES penetration levels are expected to affect a wide range of electricity system costs components. The most relevant ones are deemed to be distribution costs, since the size of distribution assets can no longer depend only on flows caused by peak demand; generation, since DG will replace part of the former production of conventional generation and the generation mix will change as well; balancing, due to the unpredictability and variability of some DG technologies and external cost, since emissions of different polluting substances are significantly lower when electricity is produced using clean renewable technologies.
Within the IMPROGRES project the evolution of the different types of costs with increasing shares of DG, ceteris paribus, has been determined. The set of system variables that are kept constant (level of demand, fuel prices, CO2 prices, etc.) are known as the background or storyline where DG impact is measured. Two different storylines have been considered, one corresponding to the year 2008 and another one corresponding to the expected situation in the year 2020. For each storyline several scenarios have been analysed: no-DG, 2008 DG, 2020 DG Medium and 2020 DG High.
Three distribution areas which have a high potential for the integration of DG/RES have been studied. These are located in Spain, the Netherlands and Germany. These areas have different characteristics in terms of the type of load existing in the area (rural/urban, etc.), the type and amount of DG present, as well as unit costs and other parameters of design of the grid.
The computation of system costs has been mainly carried out with the aid of software models owned by IMPROGRES project partners. In order to assess distribution costs, two reference network models have been employed to compute the optimally adapted distribution network for each of the previously defined scenarios. These reference network models take into account the cost of investments, operation and maintenance and losses when developing the minimum cost grid that is able to cope with the flows that are expected in each case. They also take into account DG to reduce costs if possible as well as to compute the extra costs that the latter may cause.
Simultaneously, variable generation costs and social welfare in the dispatch are computed using an economic dispatch model named COMPETES, assuming perfect competition and taking into account the substitution effect associated with the presence of DG in a set of operation scenarios representative of the operation of the system during the whole year. Fixed generation cost are computed from the result of the dispatch computed by COMPETES and using levelized costs so as to determine the amount of capacity from each conventional generation technology required to provide this energy. External cost are computed from the total production from each technology computed by COMPETES and according to the unit emission factors corresponding to each technology. All these cost factors are scaled to take into account the effect that the low capacity credit corresponding to certain technologies may have both on the production and on the amount of capacity installed of each technology (the latter for conventional ones).
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IIT Project: IMPROGRES (IMPROGRES)
Funding entity: Comisión Europea. Intelligent Energy-Europe (IEE)
Publication date: 01-03-2010
IIT-10-069I
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