Today network expansion usually follows generation, which does not take into account the costs of grid expansion in its calculations. The consequence of a missing coordinating instrument is that the objective function does not minimize the overall costs of power generation and network expansion. This can lead to a sub-optimal result in the form of higher economic costs. The aim should therefore be to increase economic welfare by internalising network infrastructure costs in the development of renewable energy (RE).
Against this background, the study conducted by E-Bridge in collaboration with the Institute of Power Systems and Power Economics of RWTH Aachen University, on behalf of innogy SE, aims to analyze and develop instruments for the regional control of the expansion of renewable energies, especially onshore wind energy and photovoltaic (PV). Focus of the evaluations is the distribution network.
The study considered the building cost subsidy, the modified distribution network component and a bonus / malus system as possible alternatives to today’s distribution grid component. All instruments aim to internalize network expansion costs in an investment decision in renewables to achieve a joint optimization of the renewables and grid expansion. However, this can only be realized, if reliable price signals in form of fixed and timely published network expansion costs are available.
The study is available via the following link:
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