Beyond the connection of DG

As the share of DG grows, what is required is not only to connect DG plants to the existing network, but to adapt the network structure. As long as DG penetration remains small, the main question is where and how it can best be connected to the existing network, and how network operators can be encouraged to connect these new generators. As DG penetration increases, it becomes necessary to not just connect plants to the network, but to integrate them into network operation. In other words, DG should not merely feed electricity into the grid, but should provide capacity and replace network investments wherever possible. Again, appropriate incentives for network operators and coordination requirements are key considerations - even more so in an unbundled sector (where generation and networks are no longer operated by the same company).

The IEA (2002) has developed a scenario of a possible deployment pathway for DG that differentiates between three different levels of penetration. This provides an illustration of the path-dependent co-evolution between technical and institutional changes (see Chapter 6). In the first stage, 'accommodation', DG is introduced into the existing system with centralised control over energy flows. This stage is about 'technical fixes' allowing distributed power plants to be connected to the existing grid, while the overall technical structure and institutions remain virtually unchanged. In the second stage, 'decentralisation', with a higher share of DG, new communication systems for controlling the network will be used. Institutional changes, such as new regulations, are required to enable these communications systems to be developed and deployed. Finally in the stage of 'dispersal' DG takes over the electricity market, based on very small 'microgrids' in which flows are coordinated rather than controlled. In this stage local communities can manage, own and operate their local electricity network. These might be connected to other networks for backup purposes only.

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