Perfect storm for monopoly grids II: The dual disruptive impact of distributed generation and local

Full presentation title: Perfect storm for monopoly grids II: The dual disruptive impact of distributed generation and local competition.

The subject addressed is the impact on grid companies when the monopoly position enjoyed by grid companies is withdrawn while distributed and renewable generation is being actively supported. Currently, grid companies enjoy a regulated monopoly position with the aim to provide reliable access for all at affordable costs. The European Commission envisions more choice and competition and proposes a first step by allowing and supporting competition within the local monopoly of DSO grids. The Winter Package, proposes that local energy communities are able to ‘own, create or lease community networks’. Facing this competitive pressure, the main question from both the energy community and DSO perspective becomes, how sizable could the application of microgrids and energy communities become within the monopoly grid? 

The problem is grid planning and investment while facing an increasingly uncertain future. The energy transition requires large-scale investment in electrical infrastructure, however the infrastructure capacity factors and economic life-time are increasingly difficult to assess. One of the potential largest uncertainties is the combination of local generation and storage with the regulatory possibility to go (partly) off-grid or enter an energy community grid. The underlying economic logic of the current grid could be severely tested as peak-loads are going up, while transported volumes are dropping and the base on which to socialize grid costs is shrinking. Pushing up capacity charges, as the Swedes are doing, could solve the peak-load costs but speed up the rate by which users and communities are going off-grid. 

The method of addressing this problem is through understanding the size and share of the off-grid and microgrids through: (1) quantification of microgrid and off-grid share using a MontheCarlo analysis using the Dutch MV and LV grids and connections on highly detail spatial (neighborhood) and temporal interval  level (hourly), (2) expand the earlier work (see Perfect Storm I) by adding neighborhood specific load curves, small wind turbines and virtual powerplants. Earlier work showed around 2/5 of electricity could be supplied and transported without use of the monopoly grids. This paper pushes the analysis forward and adds a number of important variables: is there really a Perfect Storm?

The results are: (1) quantification of volume and power of microgrid and self-generation by neighborhood, (2) the share of total connections and grid load share and power curves that could theoretically be expected to be within a microgrid and energy community, (3) quantification of trading across grid and microgrids (i.e. flexibility markets), (4) potential impact from virtual powerplants.

The strong points are the qualitative and quantitative nature of the study as well as the novelty of addressing the uncertain future by focusing on the joint forces of distributed energy sources, storage and competition. This new paper addresses point of interest that were raised and indicated by interested parties.

The  weak point is the limiting of input variables which could be relevant as well as the enormous simplification of the economics and occlusion of social and other aspects important in adoption.