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The birth of a EUropean Distributed EnErgy Partnership that will help the largescale implementation of distributed energy resources in Europe (EU-DEEP)

Final Report Summary - EU-DEEP (The birth of a EUropean Distributed EnErgy Partnership that will help the largescale implementation of distributed energy resources in Europe)

Initiated by eight European utilities, the EU-DEEP was a research and development project coordinated by GDF-SUEZ. It started in January 2004 and ended in June 2009 with a total budget close to EUR 30 million, half of it being funded by the European Commission's Sixth Framework Programme (FP6).

In 2003, several European Union policy orientations including the liberalisation of the energy markets, the use of renewable energy sources, the security of energy supply and the quality of services, were already driving the growth of 'distributed energy resources' (DER) in Europe. And yet, at the time, a number of barriers, both technical and non-technical, were preventing a larger penetration of DER. Amongst the most significant ones, EU-DEEP was structured to address:
- market integration: what are the most robust DER business models on expanding or new markets which will benefit both to end-users and utilities?
- regulation adaptation: how can regulatory bodies design market rules (through incentives, tariffs and directives) that will increase the benefits promised by DER?
- connection technologies to the grid: what are the innovative solutions which will connect DER generator sets to existing grids, so that utilities can offer new services to end-users, while providing the appropriate power quality and security?
- grid impact: how to improve on existing grid management strategies to increase the amount of connected DER while creating overall positive impacts at the transmission / distribution levels?
- DER systems: how to finalise the development of prototype DER systems (generator, storage, grid connection and communication) in order to fit best the requirements of energy markets?
Thus the single overarching goal of EU-DEEP was to design, develop and validate an innovative methodology, based on future energy market requirements, and able to produce innovative business solutions for enhanced DER deployment in Europe by 2010.

The EU-DEEP unique assumption was that a sustainable grid integration of DER must be based on validated energy demand profiles that intrinsically favour DER solutions. Once end use sectors prone to DER integration have been detected over the whole Europe, proper business options must be found that solve the integration issues with a validation based on experiments.

The resulting project ambitions were, therefore, to address removal of the above barriers by providing proactively solutions based on this demand-pull approach, meaning:
- innovative business options to favour DER grid integration;
- equipment and electric system specifications to connect safely more DER units to existing grids;
- an in-depth understanding of the effect of large penetration of DER on the performances of the electrical grid system and on the electricity market;
- market rules recommendations to regulators and policy makers that will support the three studied aggregation routes;
- a comprehensive set of dissemination actions targeting all stakeholders of DER in Europe.

The EU-DEEP consortium included partners from utilities, manufacturers, research centres and academics, business developers, investors and regulators. They brought complementary competences from the development of electric equipments to the analysis of the energy markets mechanisms.

The work package objectives and deliverables are briefly listed below:
WP1 : Demand segmentation and modelling. A market assessment methodology able to detect promising demands for DER technologies.
- WP2: Grid and market integration. Technical issues and needed changes and upgrades in power system design and operation, the potential change in power system costs due to DER, and their allocation.
- WP3: Local trading strategies. The potential, market applicability and technical requirements of the new trading possibilities and market / network services brought by DER.
WP4&5: Technology validation (field tests). Experimental validation of the results, tools and methodologies developed in WP1 and WP3, and provide field data feeding for WP2 network simulations and WP8 business model fine tuning; integration experiments of existing technologies.
WP6: Training. Training methodologies addressing decision making in DER investment.
WP7: Dissemination. Dissemination of the project results.
WP8: Business modelling. Innovative business models involving DER aggregation recommendations on future large-scale demonstrations an ad hoc legal structure for the exploitation of the project results.

Three types of DER technologies were considered: intermittent renewable energy sources, combined heat and power, and flexible demand. As for the customers, the market segment and the size are quite linked to each other: residential customers (small), commercial customers (small to medium) and industrial customers (medium to large). The types of companies investigated to implement DER aggregation are the electricity suppliers, the energy suppliers (electricity and gas) and the energy services companies (ESCO). The ESCO usually owns the equipment to be installed, so that the involvement in the project of the customer company is deeper.

The pieces of new knowledge created by EU-DEEP covered:
- technical, economical and system solutions needed to integrate DER into the existing energy system. This is where the necessary conditions for sustainable DER expansion are created and shaped.
- business options within which aggregated DER units can be properly valued from a system perspective.
- the future framework conditions that will catalyse sustainable DER development, at least in the next ten years.

An issue in future research and demonstration is the scaling rules required to size the demonstration projects, and the replicability of such experiments. EU-DEEP proposes to segment the approach to large-scale experiments into three main steps: secure 'up to the meter' experimental infrastructures, secure 'beyond the meter' samples of real clients, and 'system' experiments involving DER and DSM contribution to the electric system.

In the context of decarbonisation of the electricity production by 2020, the conditions for a massive deployment of DER must be prepared taking into account power system design rules. The charges related to the use of system must be reallocated more fairly, taking into account DER contributions to the network. EU-DEEP recommends a methodology for such cost allocation and formulates recommendations to upgrade the existing design criteria of future distribution networks.