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Smart TSO-DSO interaction schemes, market architectures and ICT Solutions for the integration of ancillary services from demand side management and distributed generation

Periodic Reporting for period 2 - SmartNet (Smart TSO-DSO interaction schemes, market architectures and ICT Solutions for the integration of ancillary services from demand side management and distributed generation)

Reporting period: 2017-07-01 to 2019-06-30

SmartNet aims at comparing different TSO-DSO interaction schemes and different real-time market architectures with the goal of finding out which would deliver the best compromise between costs and benefits for the system. In order to achieve such target, the project develops an ad hoc simulation platform which models all three layers (physical network, market and ICT), analysing three national cases (Italy, Denmark, Spain).

SmartNet analyses five different TSO-DSO coordination schemes and different architectures for real-time ancillary services markets with reference to three countries: Italy, Denmark and Spain. Such coordination schemes characterized by different roles and market architectures. In order to compare the performance of these coordination schemes, SmartNet has developed a challenging simulation platform, modelling in detail T&D networks and ancillary services markets and implementing a very detailed dataset of generators and loads. Simulations are based on very detailed national scenarios for 2030.
The same platform is also implemented in a laboratory in order to test real network equipment on the developed simulation scenarios (hardware-in-the-loop).

TSO-DSO coordination schemes are compared using a cost benefit analysis with the following indicators:
• cost of mFRR purchased in AS market for balancing and congestion management;
• cost of aFRR to cope with residual system imbalance not solved by mFRR;
• unwanted measures (e.g. load shedding) activated in case of congestion still unsolved or unpredicted after AS market clearing.
• ICT deployment costs.
Additionally, the total amount of CO2 emissions is an additional non-monetized monitored factor.

SmartNet also includes three physical pilots for testing specific technological solutions:
• technical feasibility of key communication processes (monitoring of generators in distribution networks while enabling them to participate to frequency and voltage regulation): Italian Pilot;
• capability of flexible demand to provide ancillary services for the system:
- thermal inertia of indoor swimming pools: Danish Pilot,
- distributed storage of base stations for telecommunication: Spanish Pilot.
Main findings can be summarized in the following eleven points:
• Traditional TSO-centric schemes could stay optimal if distribution networks don’t show significant congestion not unlikely in near-future scenarios, since distribution grid planning was (and still is) affected by the fit-and-forget reinforcements policy. In a first period, costs to implement monitoring and control systems within distribution networks could result higher than the effect of over-investments inefficiencies due to the old fit and forget philosophy. This could engender resistance in some DSOs to consider flexibility as a value. This could also call for a revision of present remuneration schemes for DSOs’ investments, so that they can claim OPEX and not only CAPEX.
• More advanced centralized schemes incorporating distribution constraints show higher economic performances but their performance could be undermined by big forecasting errors, which could bring them to take wrong decisions.
• Decentralized schemes are usually less efficient than centralized ones because the two-step process introduces undue rigidities. Scarcity of liquidity and potential impact of local market power, along with extra constraints introduced to avoid counteracting actions between local congestion market and balancing market (e.g. increasing system imbalance while solving local congestion) furthermore negatively affect economic efficiency of decentralized schemes.
• Local congestion markets should have a “reasonable” size and guarantee a sufficient number of actors are in competition in order to prevent scarcity of liquidity and exercise of local market power. For that, small DSOs should pool-up in order to create a common congestion management market: too many small local markets would increase ICT costs and reduce competition, with detrimental effects.
• Ensuring level playing field in the participation of distributed resources (especially industrial loads) to the tertiary market means to be able to incorporate into the market products some peculiarities of such resources (loads or generators) without which it is nearly impossible for them to participate. This could imply to enable complex bids or other sophisticated products.

Concerning exploitation, a plan was produced by Task 7.4 (D7.6). This deliverable, created during the last project year with an important participation from the industrial partners members of the consortium, puts in highlight five actual exploitable platforms produced by SmartNet:
- The simulation platform,
- ICT and architectures for each of the three project pilots,
- The ICT Platform assessed in the WP3 of the project.

Particularly worth of mentioning, the results of the Pilot A (Italian Pilot) were publicly declared as of national interest by the Italian Regulator ARERA during the final SmartNet workshop (Arona, May 2019). Furthermore, the final achievements of the SmartNet project as presented in the final project workshop in Arona are extensively mentioned in the recent consultation document “Testo Integrato del Dispacciamento Elettrico (TIDE) – orientamenti complessivi” (document 322/2019/EEL – points 3.65 and 3.66 on pages 56-57).

Two new Horizon2020 projects, both started in January 2019 will take an important heritage of the SmartNet project: INTERRFACE and CoordiNet.
Finally, the newly awarded Horizon2020 project FlexPlan, availing itself of the same coordinating person as the SmartNet project (as well as many partners in common), will still tackle the topic of “flexibility” and “TSO-DSO cooperation”, yet from the system planning point of view.
"Among the most important results of the SmartNet project able to advance beyond the sate-of-the-art are:

1. The definition of the five reference TSO-DSO coordination schemes to be implemented into the simulation platform – this work consisted in a preliminary screening of the most relevant roles that the two network operators can assume and of the interaction needed for each of them.

2. The definition of a detailed benchmark model at the time horizon 2030 for Italy, Denmark and Spain – Considering needs to extend the participation to a significant amount of distributed generation from renewable energy sources and of distributed loads, some innovative market design characteristics are proposed for implementation.

3. The definition of an advanced mathematic model for distribution networks, based on Second Order Cone Programming: this provides a better approximation than usual direct current modeling, more suitable for the SmartNet needs.

4. The results of the running of the benchmark models for the three selected counties, which have produced an ""objective"" comparison of thew different TSO-DSO coordination schemes (objective because based on CBA analysis, i.e. on quantitative data). This, togethere with the connected regulatory analysis (WP6) resulted in a set of guidelines (D6.3) which should be of great interest for the NRA and for the European Commision itself.

5. The three Pilot Projects resulted in concrete schemes and implementative solutions (ICT and other) for three different TSO-DSO coordination schemes. The analysis of the results is of great importance in sight of further sand boxes proposed at national level.
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Group photo of the SmartNet consortium partners
High level flow chart of the SmartNet project activities
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