The cost of active network management schemes at distribution level

Kane, Laura and Ault, Graham (2013) The cost of active network management schemes at distribution level. In: EWEA Annual Wind Energy Event 2013, 2013-02-04 - 2013-02-07.

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The growth of wind generation in distribution networks is leading to the development of Active Network Management (ANM) strategies. ANM systems aim to increase the capacity of renewable and distributed generation (DG) that can connect to the network. In addition to DG, ANM schemes can also include storage devices and Demand Side Management (DSM) strategies. Currently ANM schemes are mainly part of network research and development programmes, funded through network innovation schemes. In future, ANM schemes will need to cover the costs of establishing such a scheme through payments from the network owners and the users of the network. This paper discusses the current charging arrangements which account for network upgrades and the access arrangements for wind farms connecting to networks which are close to capacity. The Orkney ANM scheme is used as a case study, where the costs of the implemented ANM scheme are compared to conventional network upgrades. In order to run ANM as a ‘business as usual’ case, there must be a way in which to recover the costs incurred in implementing and operating an ANM scheme on the network. These costs could be recovered through Use of System (UoS) charging, and there is an opportunity for domestic customers participating in an ANM scheme (through Demand Side Management, for example) to further reduce electricity bills by providing ancillary services to the network. ANM may increase the cost of electricity for domestic customers, however this increase can be considered substantially less than the cost incurred for significant network upgrades.