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Enhancement of sustainable electricity supply through improvements of the regulatory framework of the distribution network for distributed generation (DG-GRID)

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Distributed generation (DG) is the generation of electricity from a multitude of small energy sources, reducing the distance over which the energy needs to be transported. . DG-Grid focussed on four main objectives. The first was to review the current EU economic and regulatory frameworks for electricity networks and markets and identify how to remove the barriers to the use of renewable energy sources (RES) and combined heat and power (CHP). The second was to analyse interaction between regulations, the volume of RES and CHP used and innovative networks. Thirdly, the project set out to assess the impact of RES and CHP market penetration by looking at changes in revenue and expenditure flows, developing business models for an economically viable grid system and a cost/benefit analysis of different regulatory designs. Finally, the project sought to develop guidelines for the network planning, regulation and improved integration of DGs.

Results

  • A comprehensive review of electricity regulation in the EU Member States today;
  • Analysis of possible innovations and long-term development of electricity grids;
  • Assessments of costs and benefits to networks in the case of large-scale DG use;
  • Analysis of regulatory arrangements for economically viable grid systems;
  • Recommendations and guidelines for an improved regulatory framework for distribution networks.
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Lessons learned

  • The regulatory framework should include incentives for DSOs to integrate DG. The remuneration schemes for operational and capital expenditures and the benchmarking procedures should take into account the connection and management of DG. Additional incentives should be considered to promote innovation and R&D activities by DSOs.
  • Deep connection charges that include reinforcement costs should be avoided. Either a shallow charging policy could be adopted or the use of system pricing methodology could be reformulated to allow the financial recognition of DG contribution to the network costs.
  • Participation of DG in ancillary service and balancing markets can be enhanced if market rules accept aggregation of small individual generators. The timeframe for announcing estimated production in balancing arrangements should become smaller. Last updated: 23.06.2010
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Partners and coordinator

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Contact

Energy research Centre of the Netherlands
Netherlands
Contact point: 
Name: 
Dr Marjolein de Best-Waldhober
E-mail: 
Tel: 
+31-224-564798
Name: 
Frits van Oostvoorn
Tel: 
0031 224 564438
Name: 
Henk F. Kaan
E-mail: 
Tel: 
0031-224-56 4500
Name: 
(Marc) H.M. Londo
E-mail: 
Tel: 
0031 224 568253
Name: 
Nico van der Linden
Tel: 
0031 0 22456 4433
Name: 
Martin Scheepers
Tel: 
0031 224 564436
Name: 
marc Londo
E-mail: 
Tel: 
0031 224 568253
Name: 
Nico van der Linden
Tel: 
0031 224 564433
Name: 
Karina Veum
E-mail: 
Tel: 
0031-224-560882
Name: 
Frans Nieuwenhout
Tel: 
+31 224 564849

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Key documents

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In brief

Duration:
01/01/2005 to 30/06/2007
Contract number: 
EIALT/EIE/04/015/2004

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