Summary:
Electricity distribution grids have been identified as a potential bottleneck for the rapid rollout of renewable generation due to insufficient hosting capacity and barriers to its expansion. This paper assesses the implications of relaxing hosting capacity (HC) calculation criteria for investment decisions in new renewable generation at a specific network bus. Additionally, the potential of combining HC relaxation with the hybridisation of renewable generation technologies is quantified. To this end, a model that maximizes investor returns under constrained grid capacity conditions is developed. The methodology accounts for uncertainty in HC, renewable resource availability, and market prices. The investor risk is represented via Conditional Value-at-Risk, thereby accounting for tail-risk exposure under adverse conditions. The case study demonstrates that relaxing the HC calculation criteria unlocks additional electricity grid's capacity to absorb more energy, thereby incentivising higher levels of installed generation capacity to maximise investor profits. Transitioning from a contingency-restricted static HC to a dynamic HC definition enables a 65% increase in energy injection and raises average investor profits by 64%, without putting at risk the security criteria for the network operation. Combining HC relaxation with hybridisation increases the optimal generation capacity by 127% and average investor profits by 75%. Sensitivity analyses are performed to assess the robustness of the proposed methodology. The findings highlight the strategic value of relaxing HC calculation criteria as a mechanism to release untapped capacity in electricity distribution grids, while maintaining robust investor profitability.
Spanish layman's summary:
Este trabajo analiza cómo la flexibilización de los criterios de capacidad de acogida (HC) puede facilitar la integración de nueva generación renovable en redes de distribución. Mediante un modelo que incorpora incertidumbre y riesgo (CVaR), se demuestra que esta medida, combinada con la hibridación tecnológica, permite aprovechar capacidad de red infrautilizada y mejorar la rentabilidad de las inversiones.
English layman's summary:
This paper examines how relaxing hosting capacity (HC) criteria can facilitate the integration of new renewable generation into distribution grids. A model incorporating uncertainty and investor risk (CVaR) shows that combining HC relaxation with technology hybridisation enables underutilised grid capacity to be exploited while improving investment profitability.
Keywords: Conditional Value-at-Risk; Distributed generation; Distribution grids; Flexible connections; Hosting capacity
JCR-JIF Impact Factor and WoS quartile: 5,700 - Q1 (2025)
DOI reference:
https://doi.org/10.1016/j.segan.2026.102409
Published on paper: September 2026.
Published on-line: July 2026.
Citation:
L. Herding, L. Carvalho, R. Cossent, M. Rivier, "Renewable Capacity Investment Planning under Distribution Grid Hosting Capacity Uncertainty: a CVaR-based Approach", Sustainable Energy, Grids and Networks, Vol. 47, pp. 102409, September 2026. [Online: July 2026] doi: 10.1016/j.segan.2026.102409
