56 MAKALE / ARTICLE FUTURE OF DG iN ELECTRICITY NETWORKS Thus, despite the limited penetration of distributed power in today's OECD power markets, the future could have a power system that is much more decentralized than currently. Such a system would have potential advantages with respect to security and reliability of supply. it could emerge from the present system in three stages: ♦ the accommodation of DG in the current system ♦ the creation ofa decentralized network system that works in tandem with a centralized generation system ♦ a dispersed system in which most power is generated by decentralized stations with central generation playing a limited role. There are a few signs that electricity networks are beginning this evolution. New technologies are already being used to control output from DG at several sites to respond to market conditions, creating a kind of 'virtual utility'. The operation of a network with large number of virtual utilities will require a much greater flow of real-time information than distribution network operators currently have at their disposal. Over the long haul, there is a need to reform distribution system design requirements to accommodate DG. This would include upgrading the system to make it capable of accommodating two-way flow, including increased communications and control capabilities. The skills required to operate and manage a distribution system will become more complex. But the technical and institutional changes cited in the TEA report would make a more decentralized electric power system technically feasible. CONCLUSIONS Distributed generation is expected to play a greater role in OECD power generation over the coming decades. There is a growing interest on the part of power consumers for installing their own generating capacity in order to take advantage of flexible DG technologies to produce power during favorable times, enhance power reliability and quality, or supply heating/ cooling needs. While much of this capacity generally contributes little to overall electricity production, it can be expected to become an increasingly important source of peak supply. in this way, DG is contributing to improving the security of electricity supply. However, the introduction of increased wind and CHP systems could increase needs for primary regulation capability. Retail market liberalization will play the key role in opening up the economically efficient development of DG. Retail market liberalization will give consumers access to the distribution system. Structural reform will leave the distributor indifferent to, rather than in competition with, DG. Unbundled pricing will make it possible, at least in principle, for a distributed generator to capture the value it can bring to a distribution system, and to pay the costs that it imposes. Nevertheless, there remain substantial institutional and regulatory barriers to develop DG markets fully. Partially liberalized markets leave DG competing with the utility through its lack of legal access to the distribution grid. The lack of ENERJi & KOJENERASYON DÜNYASI 2000 ■Gas ■Oil Fueı ceııs 1800 1600 :2 1400 C 1200 100J :g 800 w 600 standards for connection of smaller DG increases transaction costs for distributor and distributed generator. Emissions regulations can be overly demanding for small sources. Reforms to OECD electricity markets therefore need to ensure that distributed generators can get access to local electricity grids and do not compete with the distribution company for supply. Regulators will play a key role in ensuring that distributors, rather than discriminating against distributed generators, are rewarded when they encourage DG that reduces distribution network costs. Standardizing interconnection rules would reduce transaction costs. Environmental approvals should be streamlined and recognize the net benefıts that DG could offer. Prices that recognize the locational value of DG to support distribution network activities, and to relieve network congestion, are also needed. lf DG does take a large share of the generation market, the role of distribution utilities will become vastly more important than currently. There will be a need to reform distribution system design requirements to accommodate DG. Further study to identify the technical capabilities, the operating strategies, and the skili requirements of distribution network operators would help prepare electricity markets for a more decentralized electricity system. References 1. IEA. 2002a. Oistributed Generation in Liberalised Electricity Markets. EA, Paris 2002. 2. IEA. 2002b. World Energy Outlook 2002. IEA, Paris 2002. Source: Cogeneration On-Site Power Production
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