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FP5

MICROGRIDS Résumé de rapport

Project ID: ENK5-CT-2002-00610
Financé au titre de: FP5-EESD
Pays: United Kingdom

Design of a suitable regulatory regime for supporting development of Microgrids

Generally, the present regulatory practices have addressed sensibly the technical requirement for connecting DGs to distribution systems in order to maintain safety and power quality. This includes the development of new standards associated with DG technologies, connection practices, protection schemes, ancillary services and metering. Administrative processes such as application for new connection have also been standardised and disseminated with an aim to make the process transparent for DG developers and investors while maintaining DSO’s monitoring ability to ensure that the necessary connection standards are not compromised.

Besides connection policies and development of technical standards, various policies were also designed to provide financial supports and favourable market environments to stimulate DG growth such as financial incentives for small generators in the forms of government grants, exemption of transmission use of system charges and transmission losses charges, climate change levy exemption, and Renewable Obligation. Incentives are also given to the DSO to facilitate more small-scale generation including micro generation in their network.

However, it is evident that DG especially micro generation still face a number of barriers such as:
-A relatively low electricity prices, which discourage new investment,

-A relatively high capital cost for renewable technology,

-A relatively high connection cost due to deep connection charges policies,

-Lack of market support mechanisms which:
--Allow DG to access freely electricity market,
-- Reward DG according to its service to the network,
-- Minimise the financial penalty for imbalances due to the use of intermittent RES.

- Lack of incentives/force for DSO to change their passive operation philosophy, which limits the amount of DG that can be connected.

Therefore, commercial questions such as creation of a level playing field, development of market for aggregators, and cost reflective network pricing to acknowledge the costs and benefits of distributed generation to the networks in addition to the key technical questions such as active management of distribution networks, coordination of the operation between microgrids and public electricity systems, and islanding mode operation are still required to be addressed and solved.

More radical changes may be necessary to facilitate efficient integration of the operation and development of microgrids in the systems, in order to extract the additional value of micro grids in terms reducing of the overall system operating costs, network investment deferral, service quality and reliability improvements and provision of a variety of services to support network operation during various disturbances.

Reported by

University of Manchester
Sackville Street, PO Box 88
M60 1QD Manchester
United Kingdom
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