- Email: [email protected]
Electric power systems research on dispersed generation
Electric Power Systems Research 77 (2007) 1143–1147
Preface
Electric power systems research on dispersed generation 1. Drivers for change Historically, distributed (or dispersed) generation (DG) has been of modest significance and the issues related to the technical and commercial integration of this generation in the power system operation and development have received little attention. Over the last several years this has been rapidly changing due to a number of economic, technical, commercial and environmental factors surrounding the electricity industry. These include introduction of competition in the industry, advances in developments of small-scale generation technologies, availability of access to sites and fuel, aging infrastructure, etc. Furthermore, DG1 has become particularly relevant for systems with large demand for electricity and/or transmission networks. In this context, location specific value of energy produced by DG may be considerably greater than that of large centrally dispatched sources giving a competitive advantage to DG. Moreover, environmentally friendly generation technologies are frequently financially supported by politically motivated governments. However, all these drivers tend to be quite specific to a particular continent, country and the structure of the electricity supply market in which DG operates. Penetration of DG may have a significant impact on the future development of power systems. In this context, it should be noted that the structure of the present electricity transmission and distribution networks was driven by an overall design philosophy developed to support large-scale generation technologies. Modern distribution systems were designed to accept bulk power from the transmission network and to distribute it to customers. According to the historical principles of network design, the real time control of distribution network is resolved through the robust specification of primary network infrastructure and hence, these networks traditionally operate as passive systems. There are two main developments that may radically change this conventional philosophy of electricity system operation and development. Firstly, in the last decade, many countries have been deploying significant amounts of DG of various technologies in response to the climate change challenge, the need to improve fuel diversity and/or to manage congestions and rein-
1 In this discussion the term distributed generation also includes demand side response.
0378-7796/$ – see front matter © 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.epsr.2006.08.010
forcements in transmission and distribution networks. This trend is likely to accelerate in the next decade. Secondly, in a number of developed countries the majority of generation, transmission and distribution infrastructure was considerably expanded in late 1950s and early 1960s to support the economic growth, and these assets now approach the end of their useful life and will need to be replaced. The increase in penetration of DG coupled with rapidly aging assets opens up the question of the infrastructure replacement strategy. There is clearly a golden opportunity to re-examine the philosophy of the traditional approach to system operation and design and develop a policy that will provide secure, efficient and sustainable future electricity supplies. In this development, DG will need to become a key part of the overall network infrastructure replacement and development strategy. 2. Importance of integration of DG However, the overall approach to system operation and development has not changed. Thus the emphasis has been on connecting DG to the network rather than integrating it into overall system operation. The early efforts have been focused on DG technology development and for more mature technologies on increasing their deployment rates. This has been of course a necessary phase in the evolution towards a potentially more sustainable and efficient electricity supply system. Current practice for connecting DG is generally based on so called “fit and forget” approach. This policy is consistent with the historic passive distribution network operation. No real attempt has been made to integrate DG in system operation. Similarly, developers and operators of DG are principally concerned with energy production from DG plant and given the current incentives framework are not particularly motivated to provide any services associated with system support. Clearly, large penetration of DG will displace considerably the energy produced by large conventional plant, but with the present approach DG will not be able to provide flexibility and controllability of conventional plant and provide network support. Hence, conventional large-scale power plants would need to remain the primary source of control of electricity system operation assuring integrity and security of the system. Similarly, if not integrated, DG would not be able to substitute for network assets. Levels of DG penetration in some countries are such that DG is beginning to cause operational problems (Denmark, Germany
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Preface / Electric Power Systems Research 77 (2007) 1143–1147
and Spain). This is because this generation is not integrated into the overall system operation. We are now entering an era where this approach is beginning to: (i) adversely impact the deployment rates of DG, (ii) increase the costs of investment and operation and (iii) undermine integrity and security of the system. In order to address these emerging difficulties, DG must takeover some of the responsibilities from large conventional power plants and begin to provide flexibility and controllability necessary to support system operation and development. Although transmission system operators have historically been responsible for system security, integration of DG will require distribution system operators to develop active network management in order to participate in the provision of system security. Otherwise DG will not be integrated in system operation, and hence the conventional generation will continue to be the only provider of system support services (e.g. load following, frequency and voltage regulation, reserves) required to maintain security and integrity of the system. This implies that large penetration of DG will not be able to displace the capacity of conventional plant and provide solutions to network problems. Given that a significant proportion of DG is likely to be connected to distribution networks, maintaining the traditional passive operation of these networks and centralised control will necessitate increase in capacities of both transmission and distribution networks. On the other hand, by fully integrating DG into network operation, DG would take the responsibility for delivery of system support services taking over this role from central generation. In this case DG would be able to displace flexibility and controllability of the conventional generation. Furthermore, DG could also provide solutions to network problems and substitute for network capacity. To achieve this distribution networks operating practice will need to change from passive to active necessitating a shift from traditional central control philosophy to a new more distributed control paradigm. This could deliver significant benefits in the long term in terms of reduced central generation capacity, increased utilisation of transmission and distribution network capacity, enhanced system security and reduced overall costs and CO2 emissions. However, the present regulatory and commercial framework would need to be radically changed in order to fully integrate DG in the operation and development of electricity systems. Particularly important are the design of appropriate ancillary servers markets to enable DG to contribute to the provision of system support services. Furthermore, new access arrangements to electricity networks will need to be developed to reward DG that can contribute to resolution of network problems, and in particular to reduce the demand for network reinforcements. It important to emphasise that the impact that DG has on transmission and distribution networks will depend on many factors, including size of generating plant, location, amount and density of generation connected. Clearly, issues of integrating significant proportion of micro generation will be quite different to ones associated with very large wind farms. In this context, the objective of this special issue is to provide an overview of the major technical and economic issues asso-
ciated with the impact of DG on operation and development of the electricity system. This includes also alternative approaches and practices specific to individual countries in Europe, US and other parts of the world. 3. Overview of the contributions in the special issue Paper by Ilic et al., “Distributed Electric Power Systems of the Future: Institutional and Technological Drivers for NearOptimal Performance”, gives a vision of a new operating paradigm for the future. The authors underline that the main drivers of changes in today’s distribution systems are demand changes, evolving technologies and industry restructuring, and stress that these drivers jointly affect the long-term system evolution. The authors point out that historically, distribution companies have relied on traditional technologies to meet the forecast demand in their area. The network capacity was designed for peak load conditions to ensure reliable service during the worst case conditions. Fundamentally, the real time control problem was resolved at planning stage, without relying much on justin-time decisions in response to the varying system conditions. Passive operation, relying on network capacity has been preferred to active network management enabled by DG, demand response and advanced network technologies. Similarly, there was no attempt to actively shape demand growth, regulatory rules and technological evolution. Consequently, today the electric power distribution systems are not as automated as many other distributed systems, telecommunications in particular. As a result, the ratio between the used and available capacity has been relatively low. More automated adaptation of demand to changes in distribution system conditions could in principle result in smaller installed capacity and in more efficient use of available resources than today. One of the key points that the authors make is that the basic technical challenge posed to the existing system by the new technologies is a fundamental risk in its own right and that new regulatory structures are needed to enforce performance criteria capable of supporting the evolving technologies. In this paper a general performance criteria is suggested to measure the tradeoffs between the cumulative costs caused by sub-optimal design and the costs of investing in new equipment and software necessary to operate more optimally in the future. They show that not only the old cost-plus regulation of distribution systems is not appropriate (as it does not offer explicit incentives to the electricity service providers to make the most out of the existing infrastructure) but also that the current performance-based-regulation may not be suitable as it is extremely sensitive to the choice of regulatory parameters. Instead, they demonstrate that an alternative regulation design could open the door to the evolving technologies in distribution systems. In this paper the authors suggest that a possible way of relating the value added to the customers by a wire company, on one side, and the tariff charged by the company, on the other, can be directly related by introducing long-run marginal costing and valuation, notably peak load pricing-type methods initially developed for the regulated industry. The
Preface / Electric Power Systems Research 77 (2007) 1143–1147
paper shows that in case that electricity consumers are price responsive or the flexibility is provided by DG technologies, peak-load pricing-based incentives could enable the distribution company to postpone its investment and make higher profits. The customers would contribute to a decreasing peak load and, therefore, to the reduced requirements for a new capacity. In the paper by Ackermann, “Distributed Resource and ReRegulated Electricity Markets” key results of a study on the potential for demand side resources and distributed generation to reduced market power are discussed. The author points out that in almost all re-regulated electricity markets, e.g. California, Scandinavia, Australia, investigations have been made in the exploitation of market power in the electricity sector. The author has presented estimates of demand-price elasticities, in particular for congested areas, in case studies involving the US and Australia. These examples show that the relatively small amount of demand response (or responsive distributed generation) is required to significantly improve the overall efficiency of the market. The author stresses that DG and demand response, active only for relatively short period of time could lead to a significant electricity price reduction (depending on the slope of the supply curve). Hence, large generation capacity is not always required in such situations and that short-term price spikes caused by withholding generation capacity might provide lower incentives than often assumed. The discussion of market power is supported by interesting case in Western Denmark that has a significant amount of CHP and wind power that had a beneficial effect on market prices. The significance of the ownership of DG projects is discussed and demonstrated that independently owned DR projects would not only lower incentives to withhold generation capacity but they would also reduce incentives for other market participants to withhold generation capacity. This is clearly an importation conclusion of this work. Furthermore, the question of location specific value of some of DG projects is discussed in the context of the competitiveness of DG technologies. The author points out that energy produced and used within the distribution network could reduce the costs of transmission services. Hence, when comparing costs of central and distributed generation, avoided transmission costs should be taken into account. England and Wales case is presented to support this discussion. Paper by Pec¸as Lopes et al., “Integrating Distributed Generation into Electric Power Systems: A review of Drivers, Challenges and Opportunities”, focuses on the impact of DG on transmission and distribution networks. A detailed discussion has been presented of the main drivers of DG integration, including environmental, regulatory and commercial. In this paper particular emphasis was placed on the need to shift network planning and operating policies away from the fit and forget policy of connecting DG to electric power systems to a new more appropriate policy of integrating DG into power system planning and operation though active management of distribution networks. Some of the opportunities that could be exploited in support of the integration and hence greater penetration of DG into electric power systems are also explored.
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A set of case studies covering both steady state and dynamic performance of the Portuguese transmission network under various development scenarios are presented. The analysis of the impacts of large DG integration in the transmission network shows that there are no dramatic problems for system operation. However as the DG penetration rises, changes in the operation policy of the network are needed in order to reduce the magnitude of some new problems. The needed operational changes are in the areas of coordination of protection systems and coordination of operation regarding ancillary services. Investments in communication infrastructures and in development of new tools for EMS and DMS environments are needed to support the required changes. Regarding the interaction between DG and distribution network a number of alternative active management schemes are discussed. In the context of voltage rise, that tends to limit the amount of DG that can be connected to weak rural systems, the authors point out that for well-designed distribution circuits there is little scope for distributed generation when simple deterministic rules (e.g. consideration of minimum load and maximum generation) are used. This practice significantly limits the connection of DG. They applied advanced probabilistic load flow and Monte-Carlo simulation techniques to quantify the probabilities of voltage limit violations, which that can be used to design appropriate active management scheme to increase the amount of DG that can be connected to the existing distribution network. The importance of provision of ancillary services by DG to support secure and reliable operation of the power system is discussed in the paper. There is potential for distribution network ancillary service markets to develop in line with the anticipated increase in electricity generation from distributed resources. Key results of a study that sought to evaluate the distribution ancillary service market opportunities applicable to both renewable and non-renewable forms of distributed generation are presented. In order to demonstrate the application of the proposed approach the UK electricity market was used. In the paper by Green and Prodanovic, “Control of InverterBased Micro-Grids” integration of small-scale non-50/60 Hz power sources via inverter-based interfaces to support loads independently of the public electricity grid is discussed. The concept proposed in this paper applies to a micro-grid that includes a mixture of sources, such as domestic or commercial CHP systems using reciprocating engines or gasturbines or roof-top photovoltaic panels that can involve a storage element such as a flywheel, battery or hydrogen electrolysis/fuel-cell system. Several modes of operation are considered, including grid-connected operation with fixed and load following local generation and island operation in which the local generation will load follow, possibly using storage or demand side participation to increase security. The authors have successfully dealt with the challenges associated with the operation of micro grids, including sharing steady-state and transient loads between generating sets, switching seamlessly from grid-connected to island operation while simultaneously incorporating active management of waveform quality improvement.
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Preface / Electric Power Systems Research 77 (2007) 1143–1147
Particular attention is devoted to exploring the performance of alternative control schemes for islanding operation, including single and nested loop control of voltage, multiple inverters with individual current control loops and master–slave arrangement of multiple inverters. In order to deal with limited transient capacity of an inverter the adopted control scheme provides transient-state sharing between close inverters. This is achieved without high bandwidth communication links by partitioning the frequency spectrum and applying different controllers to different partitions (distributed control using frequency partitioning). The proposed concepts are implemented in the experimental rig that was built with an inverter of 10 kVA and was connected to the 50 Hz voltage grid and the key functionality demonstrated. One of the distinguishing features of this concept, in contrast to more traditional micro-grid designs, is that parallel operation scheme has been designed to use low-bandwidth communication channels. Although communication is not absolutely necessary, its provision does allow for better sharing of duty in transient conditions. Although the control bandwidth of an inverter is limited by the switching frequency and the discrete nature of the control system there is sufficient bandwidth to control actively the low-order harmonic disturbances. The paper by Gordijn and Akkermans, “Business Models for Distributed Generation In a Liberalized Market Environment” considers the economic side of the introduction of new DG technologies, by investigating business requirements and models for different forms and applications of DG. They have developed a systematic methodology for constructing and assessing such new networked business models and applied this to a number of different case studies and scenarios where DG technologies may be successfully applied in the future. The paper discusses the key findings of these studies, which cover the economic potential of DG for dynamic demand response at peak hours packaged as a new business service, the market feasibility of small-scale local producers of renewable power, the usage of DG in grid balancing services and in the active management of distribution networks. Although these case studies are very different in nature, they have in common that they were all carried out employing the same systematic methodology for constructing and assessing networked business models. One of the key features of this novel approach is in its ability to represent and explain the business model of the entire value network in a concise form. This novel approach enables a rigorous assessment of the viability of the business case considering simultaneously all actors involved. The case studies for DG business focused on the situation of different countries and highlighted the potential of various novel business ideas. Their studies have revealed that the business case for DG generally improves if local DG producers are able to sell and trade directly on a power exchange market. Furthermore, an important and general finding is that regulatory policies directly impact the feasibility and attractiveness of DG business models. Whatever its specific nature, a stable regulatory framework must be in place: regulatory certainty increases market confidence in long-term commercial viability of new business models. These results indicate some interesting future research areas for studies in this domain: the modelling of the design and interplay of reg-
ulatory frameworks with new business models for DG and other technologies and the role of future retail and market aggregators for DG, and their relation to emerging concepts such as virtual power plants. The paper by Akhmatov and Knudsen “Large Penetration of Wind and Dispersed Generation into Danish Power Grid” deals with the impact of wind power and CHP generation on transient performance of the Danish power systems. Despite the large penetration of DG in the Danish power system, the centralised large power plants still control the voltage and frequency of the grid. However, this trend is now changing and large wind farms are required to contribute to the provision of system support services. The fault ride-through capability (ability of the wind turbines to maintain uninterrupted operation during and after grid faults) of the two main wind turbine concepts has been discussed. The fault ride-through capability of the fixed-speed, active-stall controlled wind turbines is based on the power ramp. This control feature is based on activation of the blade-angle control to reduce the mechanical power of the wind turbines. Use of the power ramp has minimised the demand for dynamic reactive compensation. The ride-through capability of the variable-speed, pitch controlled wind turbines is based on the use of the crowbar protection. After the grid fault is cleared and the voltage is re-established, the crowbar is removed and the frequency converter restarts. A number of comprehensive short-term stability investigations carried out on the Danish grid are presented and discussed. The authors point out that at present voltage and frequency in the Danish grid are re-established with the use of controls provided by the centralised, large synchronous power plants, but that in the years to come, wind generation in particular will need to take over some of these responsibilities to support stable and secure operation of transmission grids. The paper by G. Strbac, et al., “Impact of Wind Generation on the Operation and Development of the UK Electricity System” provides order of magnitude estimates of costs of integrating wind power in the UK network. The paper demonstrates that as wind power is variable, it will be necessary to retain a significant proportion of conventional plant to ensure security of supply especially under conditions of high demand and low wind. Hence, the capacity value of wind generation will be limited as it will not be possible to displace conventional generation capacity on a “megawatt for megawatt” basis Furthermore, as wind power is not easy to predict, various forms of additional reserves will be needed to maintain the balance between supply and demand at all times. The need for reserve and cost of providing it are estimated. The location of the new wind energy sources will be of considerable importance in assessing the impacts on the electricity system. A diverse wind portfolio with capacity spread around the country will reduce the impact of the variability of wind compared with the capacity being concentrated geographically. Additionally, if the majority of wind generation plant is located in Scotland and the North of England, reinforcement of the transmission network will be needed to accommodate the increases in the north-south flow of electricity.
Preface / Electric Power Systems Research 77 (2007) 1143–1147
There are also technical issues associated with the operation of the transmission network with particular emphasis on the ability of wind generation to withstand disturbances on the transmission system (faults). Estimates of the value of fault ride through were established. The paper provides an assessment of the costs and benefits of wind generation in the UK electricity system, for different levels of wind power capacity. Overall, it is concluded that the system will be able to accommodate significant increases in wind power generation with relatively small increases in overall costs of supply. These additional costs will be primarily driven by the capital cost of wind generation while the benefits in terms of the cost of fuel saved will be directly influenced by fuel prices. Additional costs of reinforcing the transmission network will also be incurred especially if the majority of the new wind capacity is located in Scotland and the North of England. The assessment of the situation in 2020 assuming 25 GW of installed wind capacity (i.e. the 2020 renewable energy aspiration of the UK Government is met by wind alone) shows that the net additional costs (i.e. costs less benefits) amount to around 0.28 p/kWh which is less than 5% of the current domestic electricity price. These costs should also be viewed in the context of the recent impact of gas price rises on the cost of electricity. It should be noted that the additional operating cost associated with accommodating the variable and unpredictable output of wind power represents a relatively small proportion of the total. 4. Concluding remarks In the papers presented in this special issue, evolving technologies, industry restructuring, demand changes and aging assets have been identified as the main drivers for changes in the electricity industry. The papers also present an overview of the challenges that must be overcome in order to cost effectively integrate DG into electric power systems. Penetration of DG and responsive demand challenges the operation of traditional distribution company based on passive operation philosophy with the real time control problem being resolved in planning stage. On the other hand, new technologies that can provide flexible and effective responses, could therefore reduce the need for network capacity reserve at the system level. Opportunities offered by emerging technologies, such as DG and demand response, should be recognised in the context of regulatory frameworks if efficient evolution of the future distributed power systems is to be achieved. As DG and demand response penetration increases it will become an economic imperative that DG participates in the provision of ancillary services needed for secure and reliable operation of the power system. This is considered important for the simple reason that if DG only displaces the energy produced by central generation but not the associated flexibility and controllability, the overall cost of operating the entire system will rise. Another reason for exploring ancillary service provision by DG is to improve the economic viability of some DG projects. This would however require change in operating policy from the fit and forget approach to actively managed distribution
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networks. Investments in communication infrastructures and in development of new tools for EMS and DMS environments are needed to support the required changes, as the complexity of network control will increase. This would also enable demand response and responsive distributed generation to contribute to improvement of the overall efficiency of the market which should lead electricity price reductions. New techniques have been developed for constructing and assessing DG business models. It was demonstrated that it is critically important to be able to represent and explain the business model of the entire value chain in order to rigorously assess the viability of the business cases considering simultaneously all actors involved. The impact of distributed generation on performance of distribution and transmission networks will depend on the type of DG technology, density and level of penetration. In this context integration of small-scale generation in the form of microgrids, supported by the application of power electronic interfaces, could potentially contribute to improvements in service quality seen by end customers. This is because the performance of medium and low voltage networks has a dominant effect on the overall quality of service. In order for DG to reduce the impact of outages it should be possible to operate in an islanded mode. A number of alternative solutions are being considered, some of which may benefit from communication systems, particularly if transient response is critical. However, more research is needed for cost effective solutions to the islanding problem to be derived. Wind power, both on- and offshore, is presently the principal commercially available and scaleable renewable energy technology. Hence it will deliver the majority of the required growth in renewable energy and continue to be the dominant renewable technology out to 2020. Potential operational problems would stem from three principal causes, namely, the intermittent nature of the output of wind generation, the location and remoteness of the resource relative to centres of demand and the unusual form of generator technology used. These concerns focus on the ability of the system with significant wind penetration to maintain secure operation along with the additional costs attributable to capacity and system balancing. Furthermore, given the location of wind generation (both on shore and off shore), there is likely to be a need to reinforce the existing transmission network and to expand the boundaries of the network beyond the shore. In addition, the robustness and stability of modern wind turbine generators is not fully understood. The initial assessments of the impact of wind generation on the system operation suggest that the cost of integration of wind power is modest. However, significantly more work is required to quantify more precisely the technical and economic impacts of wind generation on the electricity infrastructure and to evaluate options for cost effective integration of this resource in the operation and development of the electricity system. Goran Strbac Professor of Electrical Energy Systems, Imperial College London, London SW7 2AZ, United Kingdom E-mail address: [email protected] Available online 18 October 2006
Preface
Electric power systems research on dispersed generation 1. Drivers for change Historically, distributed (or dispersed) generation (DG) has been of modest significance and the issues related to the technical and commercial integration of this generation in the power system operation and development have received little attention. Over the last several years this has been rapidly changing due to a number of economic, technical, commercial and environmental factors surrounding the electricity industry. These include introduction of competition in the industry, advances in developments of small-scale generation technologies, availability of access to sites and fuel, aging infrastructure, etc. Furthermore, DG1 has become particularly relevant for systems with large demand for electricity and/or transmission networks. In this context, location specific value of energy produced by DG may be considerably greater than that of large centrally dispatched sources giving a competitive advantage to DG. Moreover, environmentally friendly generation technologies are frequently financially supported by politically motivated governments. However, all these drivers tend to be quite specific to a particular continent, country and the structure of the electricity supply market in which DG operates. Penetration of DG may have a significant impact on the future development of power systems. In this context, it should be noted that the structure of the present electricity transmission and distribution networks was driven by an overall design philosophy developed to support large-scale generation technologies. Modern distribution systems were designed to accept bulk power from the transmission network and to distribute it to customers. According to the historical principles of network design, the real time control of distribution network is resolved through the robust specification of primary network infrastructure and hence, these networks traditionally operate as passive systems. There are two main developments that may radically change this conventional philosophy of electricity system operation and development. Firstly, in the last decade, many countries have been deploying significant amounts of DG of various technologies in response to the climate change challenge, the need to improve fuel diversity and/or to manage congestions and rein-
1 In this discussion the term distributed generation also includes demand side response.
0378-7796/$ – see front matter © 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.epsr.2006.08.010
forcements in transmission and distribution networks. This trend is likely to accelerate in the next decade. Secondly, in a number of developed countries the majority of generation, transmission and distribution infrastructure was considerably expanded in late 1950s and early 1960s to support the economic growth, and these assets now approach the end of their useful life and will need to be replaced. The increase in penetration of DG coupled with rapidly aging assets opens up the question of the infrastructure replacement strategy. There is clearly a golden opportunity to re-examine the philosophy of the traditional approach to system operation and design and develop a policy that will provide secure, efficient and sustainable future electricity supplies. In this development, DG will need to become a key part of the overall network infrastructure replacement and development strategy. 2. Importance of integration of DG However, the overall approach to system operation and development has not changed. Thus the emphasis has been on connecting DG to the network rather than integrating it into overall system operation. The early efforts have been focused on DG technology development and for more mature technologies on increasing their deployment rates. This has been of course a necessary phase in the evolution towards a potentially more sustainable and efficient electricity supply system. Current practice for connecting DG is generally based on so called “fit and forget” approach. This policy is consistent with the historic passive distribution network operation. No real attempt has been made to integrate DG in system operation. Similarly, developers and operators of DG are principally concerned with energy production from DG plant and given the current incentives framework are not particularly motivated to provide any services associated with system support. Clearly, large penetration of DG will displace considerably the energy produced by large conventional plant, but with the present approach DG will not be able to provide flexibility and controllability of conventional plant and provide network support. Hence, conventional large-scale power plants would need to remain the primary source of control of electricity system operation assuring integrity and security of the system. Similarly, if not integrated, DG would not be able to substitute for network assets. Levels of DG penetration in some countries are such that DG is beginning to cause operational problems (Denmark, Germany
1144
Preface / Electric Power Systems Research 77 (2007) 1143–1147
and Spain). This is because this generation is not integrated into the overall system operation. We are now entering an era where this approach is beginning to: (i) adversely impact the deployment rates of DG, (ii) increase the costs of investment and operation and (iii) undermine integrity and security of the system. In order to address these emerging difficulties, DG must takeover some of the responsibilities from large conventional power plants and begin to provide flexibility and controllability necessary to support system operation and development. Although transmission system operators have historically been responsible for system security, integration of DG will require distribution system operators to develop active network management in order to participate in the provision of system security. Otherwise DG will not be integrated in system operation, and hence the conventional generation will continue to be the only provider of system support services (e.g. load following, frequency and voltage regulation, reserves) required to maintain security and integrity of the system. This implies that large penetration of DG will not be able to displace the capacity of conventional plant and provide solutions to network problems. Given that a significant proportion of DG is likely to be connected to distribution networks, maintaining the traditional passive operation of these networks and centralised control will necessitate increase in capacities of both transmission and distribution networks. On the other hand, by fully integrating DG into network operation, DG would take the responsibility for delivery of system support services taking over this role from central generation. In this case DG would be able to displace flexibility and controllability of the conventional generation. Furthermore, DG could also provide solutions to network problems and substitute for network capacity. To achieve this distribution networks operating practice will need to change from passive to active necessitating a shift from traditional central control philosophy to a new more distributed control paradigm. This could deliver significant benefits in the long term in terms of reduced central generation capacity, increased utilisation of transmission and distribution network capacity, enhanced system security and reduced overall costs and CO2 emissions. However, the present regulatory and commercial framework would need to be radically changed in order to fully integrate DG in the operation and development of electricity systems. Particularly important are the design of appropriate ancillary servers markets to enable DG to contribute to the provision of system support services. Furthermore, new access arrangements to electricity networks will need to be developed to reward DG that can contribute to resolution of network problems, and in particular to reduce the demand for network reinforcements. It important to emphasise that the impact that DG has on transmission and distribution networks will depend on many factors, including size of generating plant, location, amount and density of generation connected. Clearly, issues of integrating significant proportion of micro generation will be quite different to ones associated with very large wind farms. In this context, the objective of this special issue is to provide an overview of the major technical and economic issues asso-
ciated with the impact of DG on operation and development of the electricity system. This includes also alternative approaches and practices specific to individual countries in Europe, US and other parts of the world. 3. Overview of the contributions in the special issue Paper by Ilic et al., “Distributed Electric Power Systems of the Future: Institutional and Technological Drivers for NearOptimal Performance”, gives a vision of a new operating paradigm for the future. The authors underline that the main drivers of changes in today’s distribution systems are demand changes, evolving technologies and industry restructuring, and stress that these drivers jointly affect the long-term system evolution. The authors point out that historically, distribution companies have relied on traditional technologies to meet the forecast demand in their area. The network capacity was designed for peak load conditions to ensure reliable service during the worst case conditions. Fundamentally, the real time control problem was resolved at planning stage, without relying much on justin-time decisions in response to the varying system conditions. Passive operation, relying on network capacity has been preferred to active network management enabled by DG, demand response and advanced network technologies. Similarly, there was no attempt to actively shape demand growth, regulatory rules and technological evolution. Consequently, today the electric power distribution systems are not as automated as many other distributed systems, telecommunications in particular. As a result, the ratio between the used and available capacity has been relatively low. More automated adaptation of demand to changes in distribution system conditions could in principle result in smaller installed capacity and in more efficient use of available resources than today. One of the key points that the authors make is that the basic technical challenge posed to the existing system by the new technologies is a fundamental risk in its own right and that new regulatory structures are needed to enforce performance criteria capable of supporting the evolving technologies. In this paper a general performance criteria is suggested to measure the tradeoffs between the cumulative costs caused by sub-optimal design and the costs of investing in new equipment and software necessary to operate more optimally in the future. They show that not only the old cost-plus regulation of distribution systems is not appropriate (as it does not offer explicit incentives to the electricity service providers to make the most out of the existing infrastructure) but also that the current performance-based-regulation may not be suitable as it is extremely sensitive to the choice of regulatory parameters. Instead, they demonstrate that an alternative regulation design could open the door to the evolving technologies in distribution systems. In this paper the authors suggest that a possible way of relating the value added to the customers by a wire company, on one side, and the tariff charged by the company, on the other, can be directly related by introducing long-run marginal costing and valuation, notably peak load pricing-type methods initially developed for the regulated industry. The
Preface / Electric Power Systems Research 77 (2007) 1143–1147
paper shows that in case that electricity consumers are price responsive or the flexibility is provided by DG technologies, peak-load pricing-based incentives could enable the distribution company to postpone its investment and make higher profits. The customers would contribute to a decreasing peak load and, therefore, to the reduced requirements for a new capacity. In the paper by Ackermann, “Distributed Resource and ReRegulated Electricity Markets” key results of a study on the potential for demand side resources and distributed generation to reduced market power are discussed. The author points out that in almost all re-regulated electricity markets, e.g. California, Scandinavia, Australia, investigations have been made in the exploitation of market power in the electricity sector. The author has presented estimates of demand-price elasticities, in particular for congested areas, in case studies involving the US and Australia. These examples show that the relatively small amount of demand response (or responsive distributed generation) is required to significantly improve the overall efficiency of the market. The author stresses that DG and demand response, active only for relatively short period of time could lead to a significant electricity price reduction (depending on the slope of the supply curve). Hence, large generation capacity is not always required in such situations and that short-term price spikes caused by withholding generation capacity might provide lower incentives than often assumed. The discussion of market power is supported by interesting case in Western Denmark that has a significant amount of CHP and wind power that had a beneficial effect on market prices. The significance of the ownership of DG projects is discussed and demonstrated that independently owned DR projects would not only lower incentives to withhold generation capacity but they would also reduce incentives for other market participants to withhold generation capacity. This is clearly an importation conclusion of this work. Furthermore, the question of location specific value of some of DG projects is discussed in the context of the competitiveness of DG technologies. The author points out that energy produced and used within the distribution network could reduce the costs of transmission services. Hence, when comparing costs of central and distributed generation, avoided transmission costs should be taken into account. England and Wales case is presented to support this discussion. Paper by Pec¸as Lopes et al., “Integrating Distributed Generation into Electric Power Systems: A review of Drivers, Challenges and Opportunities”, focuses on the impact of DG on transmission and distribution networks. A detailed discussion has been presented of the main drivers of DG integration, including environmental, regulatory and commercial. In this paper particular emphasis was placed on the need to shift network planning and operating policies away from the fit and forget policy of connecting DG to electric power systems to a new more appropriate policy of integrating DG into power system planning and operation though active management of distribution networks. Some of the opportunities that could be exploited in support of the integration and hence greater penetration of DG into electric power systems are also explored.
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A set of case studies covering both steady state and dynamic performance of the Portuguese transmission network under various development scenarios are presented. The analysis of the impacts of large DG integration in the transmission network shows that there are no dramatic problems for system operation. However as the DG penetration rises, changes in the operation policy of the network are needed in order to reduce the magnitude of some new problems. The needed operational changes are in the areas of coordination of protection systems and coordination of operation regarding ancillary services. Investments in communication infrastructures and in development of new tools for EMS and DMS environments are needed to support the required changes. Regarding the interaction between DG and distribution network a number of alternative active management schemes are discussed. In the context of voltage rise, that tends to limit the amount of DG that can be connected to weak rural systems, the authors point out that for well-designed distribution circuits there is little scope for distributed generation when simple deterministic rules (e.g. consideration of minimum load and maximum generation) are used. This practice significantly limits the connection of DG. They applied advanced probabilistic load flow and Monte-Carlo simulation techniques to quantify the probabilities of voltage limit violations, which that can be used to design appropriate active management scheme to increase the amount of DG that can be connected to the existing distribution network. The importance of provision of ancillary services by DG to support secure and reliable operation of the power system is discussed in the paper. There is potential for distribution network ancillary service markets to develop in line with the anticipated increase in electricity generation from distributed resources. Key results of a study that sought to evaluate the distribution ancillary service market opportunities applicable to both renewable and non-renewable forms of distributed generation are presented. In order to demonstrate the application of the proposed approach the UK electricity market was used. In the paper by Green and Prodanovic, “Control of InverterBased Micro-Grids” integration of small-scale non-50/60 Hz power sources via inverter-based interfaces to support loads independently of the public electricity grid is discussed. The concept proposed in this paper applies to a micro-grid that includes a mixture of sources, such as domestic or commercial CHP systems using reciprocating engines or gasturbines or roof-top photovoltaic panels that can involve a storage element such as a flywheel, battery or hydrogen electrolysis/fuel-cell system. Several modes of operation are considered, including grid-connected operation with fixed and load following local generation and island operation in which the local generation will load follow, possibly using storage or demand side participation to increase security. The authors have successfully dealt with the challenges associated with the operation of micro grids, including sharing steady-state and transient loads between generating sets, switching seamlessly from grid-connected to island operation while simultaneously incorporating active management of waveform quality improvement.
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Particular attention is devoted to exploring the performance of alternative control schemes for islanding operation, including single and nested loop control of voltage, multiple inverters with individual current control loops and master–slave arrangement of multiple inverters. In order to deal with limited transient capacity of an inverter the adopted control scheme provides transient-state sharing between close inverters. This is achieved without high bandwidth communication links by partitioning the frequency spectrum and applying different controllers to different partitions (distributed control using frequency partitioning). The proposed concepts are implemented in the experimental rig that was built with an inverter of 10 kVA and was connected to the 50 Hz voltage grid and the key functionality demonstrated. One of the distinguishing features of this concept, in contrast to more traditional micro-grid designs, is that parallel operation scheme has been designed to use low-bandwidth communication channels. Although communication is not absolutely necessary, its provision does allow for better sharing of duty in transient conditions. Although the control bandwidth of an inverter is limited by the switching frequency and the discrete nature of the control system there is sufficient bandwidth to control actively the low-order harmonic disturbances. The paper by Gordijn and Akkermans, “Business Models for Distributed Generation In a Liberalized Market Environment” considers the economic side of the introduction of new DG technologies, by investigating business requirements and models for different forms and applications of DG. They have developed a systematic methodology for constructing and assessing such new networked business models and applied this to a number of different case studies and scenarios where DG technologies may be successfully applied in the future. The paper discusses the key findings of these studies, which cover the economic potential of DG for dynamic demand response at peak hours packaged as a new business service, the market feasibility of small-scale local producers of renewable power, the usage of DG in grid balancing services and in the active management of distribution networks. Although these case studies are very different in nature, they have in common that they were all carried out employing the same systematic methodology for constructing and assessing networked business models. One of the key features of this novel approach is in its ability to represent and explain the business model of the entire value network in a concise form. This novel approach enables a rigorous assessment of the viability of the business case considering simultaneously all actors involved. The case studies for DG business focused on the situation of different countries and highlighted the potential of various novel business ideas. Their studies have revealed that the business case for DG generally improves if local DG producers are able to sell and trade directly on a power exchange market. Furthermore, an important and general finding is that regulatory policies directly impact the feasibility and attractiveness of DG business models. Whatever its specific nature, a stable regulatory framework must be in place: regulatory certainty increases market confidence in long-term commercial viability of new business models. These results indicate some interesting future research areas for studies in this domain: the modelling of the design and interplay of reg-
ulatory frameworks with new business models for DG and other technologies and the role of future retail and market aggregators for DG, and their relation to emerging concepts such as virtual power plants. The paper by Akhmatov and Knudsen “Large Penetration of Wind and Dispersed Generation into Danish Power Grid” deals with the impact of wind power and CHP generation on transient performance of the Danish power systems. Despite the large penetration of DG in the Danish power system, the centralised large power plants still control the voltage and frequency of the grid. However, this trend is now changing and large wind farms are required to contribute to the provision of system support services. The fault ride-through capability (ability of the wind turbines to maintain uninterrupted operation during and after grid faults) of the two main wind turbine concepts has been discussed. The fault ride-through capability of the fixed-speed, active-stall controlled wind turbines is based on the power ramp. This control feature is based on activation of the blade-angle control to reduce the mechanical power of the wind turbines. Use of the power ramp has minimised the demand for dynamic reactive compensation. The ride-through capability of the variable-speed, pitch controlled wind turbines is based on the use of the crowbar protection. After the grid fault is cleared and the voltage is re-established, the crowbar is removed and the frequency converter restarts. A number of comprehensive short-term stability investigations carried out on the Danish grid are presented and discussed. The authors point out that at present voltage and frequency in the Danish grid are re-established with the use of controls provided by the centralised, large synchronous power plants, but that in the years to come, wind generation in particular will need to take over some of these responsibilities to support stable and secure operation of transmission grids. The paper by G. Strbac, et al., “Impact of Wind Generation on the Operation and Development of the UK Electricity System” provides order of magnitude estimates of costs of integrating wind power in the UK network. The paper demonstrates that as wind power is variable, it will be necessary to retain a significant proportion of conventional plant to ensure security of supply especially under conditions of high demand and low wind. Hence, the capacity value of wind generation will be limited as it will not be possible to displace conventional generation capacity on a “megawatt for megawatt” basis Furthermore, as wind power is not easy to predict, various forms of additional reserves will be needed to maintain the balance between supply and demand at all times. The need for reserve and cost of providing it are estimated. The location of the new wind energy sources will be of considerable importance in assessing the impacts on the electricity system. A diverse wind portfolio with capacity spread around the country will reduce the impact of the variability of wind compared with the capacity being concentrated geographically. Additionally, if the majority of wind generation plant is located in Scotland and the North of England, reinforcement of the transmission network will be needed to accommodate the increases in the north-south flow of electricity.
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There are also technical issues associated with the operation of the transmission network with particular emphasis on the ability of wind generation to withstand disturbances on the transmission system (faults). Estimates of the value of fault ride through were established. The paper provides an assessment of the costs and benefits of wind generation in the UK electricity system, for different levels of wind power capacity. Overall, it is concluded that the system will be able to accommodate significant increases in wind power generation with relatively small increases in overall costs of supply. These additional costs will be primarily driven by the capital cost of wind generation while the benefits in terms of the cost of fuel saved will be directly influenced by fuel prices. Additional costs of reinforcing the transmission network will also be incurred especially if the majority of the new wind capacity is located in Scotland and the North of England. The assessment of the situation in 2020 assuming 25 GW of installed wind capacity (i.e. the 2020 renewable energy aspiration of the UK Government is met by wind alone) shows that the net additional costs (i.e. costs less benefits) amount to around 0.28 p/kWh which is less than 5% of the current domestic electricity price. These costs should also be viewed in the context of the recent impact of gas price rises on the cost of electricity. It should be noted that the additional operating cost associated with accommodating the variable and unpredictable output of wind power represents a relatively small proportion of the total. 4. Concluding remarks In the papers presented in this special issue, evolving technologies, industry restructuring, demand changes and aging assets have been identified as the main drivers for changes in the electricity industry. The papers also present an overview of the challenges that must be overcome in order to cost effectively integrate DG into electric power systems. Penetration of DG and responsive demand challenges the operation of traditional distribution company based on passive operation philosophy with the real time control problem being resolved in planning stage. On the other hand, new technologies that can provide flexible and effective responses, could therefore reduce the need for network capacity reserve at the system level. Opportunities offered by emerging technologies, such as DG and demand response, should be recognised in the context of regulatory frameworks if efficient evolution of the future distributed power systems is to be achieved. As DG and demand response penetration increases it will become an economic imperative that DG participates in the provision of ancillary services needed for secure and reliable operation of the power system. This is considered important for the simple reason that if DG only displaces the energy produced by central generation but not the associated flexibility and controllability, the overall cost of operating the entire system will rise. Another reason for exploring ancillary service provision by DG is to improve the economic viability of some DG projects. This would however require change in operating policy from the fit and forget approach to actively managed distribution
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networks. Investments in communication infrastructures and in development of new tools for EMS and DMS environments are needed to support the required changes, as the complexity of network control will increase. This would also enable demand response and responsive distributed generation to contribute to improvement of the overall efficiency of the market which should lead electricity price reductions. New techniques have been developed for constructing and assessing DG business models. It was demonstrated that it is critically important to be able to represent and explain the business model of the entire value chain in order to rigorously assess the viability of the business cases considering simultaneously all actors involved. The impact of distributed generation on performance of distribution and transmission networks will depend on the type of DG technology, density and level of penetration. In this context integration of small-scale generation in the form of microgrids, supported by the application of power electronic interfaces, could potentially contribute to improvements in service quality seen by end customers. This is because the performance of medium and low voltage networks has a dominant effect on the overall quality of service. In order for DG to reduce the impact of outages it should be possible to operate in an islanded mode. A number of alternative solutions are being considered, some of which may benefit from communication systems, particularly if transient response is critical. However, more research is needed for cost effective solutions to the islanding problem to be derived. Wind power, both on- and offshore, is presently the principal commercially available and scaleable renewable energy technology. Hence it will deliver the majority of the required growth in renewable energy and continue to be the dominant renewable technology out to 2020. Potential operational problems would stem from three principal causes, namely, the intermittent nature of the output of wind generation, the location and remoteness of the resource relative to centres of demand and the unusual form of generator technology used. These concerns focus on the ability of the system with significant wind penetration to maintain secure operation along with the additional costs attributable to capacity and system balancing. Furthermore, given the location of wind generation (both on shore and off shore), there is likely to be a need to reinforce the existing transmission network and to expand the boundaries of the network beyond the shore. In addition, the robustness and stability of modern wind turbine generators is not fully understood. The initial assessments of the impact of wind generation on the system operation suggest that the cost of integration of wind power is modest. However, significantly more work is required to quantify more precisely the technical and economic impacts of wind generation on the electricity infrastructure and to evaluate options for cost effective integration of this resource in the operation and development of the electricity system. Goran Strbac Professor of Electrical Energy Systems, Imperial College London, London SW7 2AZ, United Kingdom E-mail address: [email protected] Available online 18 October 2006