Avoided losses on LV networks as a result of microgeneration

In the scope of the discussions about microgeneration (and microgrids), the avoided electrical losses are often pointed out as an important value to be credited to those entities. Therefore, methods to assess the impact of microgeneration on losses must be developed in order to support the definition of a suitable regulatory framework for the economic integration of microgeneration on distribution networks. This paper presents an analytical method to quantify the value of avoided losses that microgeneration may produce on LV networks. Intervals of expected avoided losses are used to account for the variation of avoided losses due to the number, size and location of microgenerators, as well as for the kind of load distribution on LV networks.

The Smart Paradox : Stimulate the deployment of Smart grids with effective regulatory instruments

The concept of SG (Smart Grids) encompasses a set of technologies that raise the intelligence of the electrical networks, such as smart meters or instruments of communication, sensing and auto-correction of networks. Nevertheless, the cost is still an important obstacle for the transformation of the current electricity system into a smarter one. Regulation can have an important role in setting up a favorable framework that fosters investments. However, the novelty with SG is the disembodied character of the technology, which may change the incentives of the regulated network companies to invest, affecting the effectiveness of the regulatory instruments (“cost plus” or “price cap”). This paper demonstrates that the solution to this “Smart” paradox requires strong incentive regulation mechanisms able to stimulate the adoption of SG technologies. Moreover, the regulation should not jeopardize conventional investments that are unable to be substituted by SG. Thus, a combination of performance regulation and efficiency obligations may be necessary.