In: ENERGIEWIRTSCHAFTLICHE TAGESFRAGEN 60th ed. (2010) Issue ½
The implementation of smart grids places great demands on the technical operation and raises questions about network charges. Thus, implementation requires short and medium-term adjustments to existing technical solutions, the harmonization of technical fundamentals (for example, data formats), and long-term new energy strategies. In short: smart grids will change the nets. The resulting costs associated with the construction and operation of smart grids, as well as changes in the energy flow, will be an important determinant of network charging in the future.
initial situation
In future, especially in the context of increasing decentralized generation, German electricity grids will have to be made "smarter", not least because of the European Union's target of generating at least 20% of final energy from renewable resources by 2020. It follows that in Germany too, by 2020, the share of renewable energies in the electricity supply must be increased to 30% of the total energy consumption. One focus of the so-called smart grids lies in the decentralized or distributed generation, consumption and management of network users in the sense of the German Energy Industry Act (EnWG) using information and communication technology.
The integration of decentralized generation has become much more important in just a few years because of priority treatment of electricity from renewable energy sources. According to the Renewable Energy Sources Act (EEG), grid operators are required to immediately connect plants generating electricity from renewable energies and mine gas to their grid at the point of interconnection (interconnection point) that is suitable for the voltage level, and which has the shortest distance as the crow flies to the location of the facility, if no other network offers a technically and economically favourable linkage point (§ 5 (1) sentence 1 EEG).
According to the EEG, the obligation to connect to the grid also exists if the reduction of electricity is only possible through optimization, reinforcement or expansion of the network (expansion of grid capacity). Without prejudice to this obligation to expand network capacity, the grid operator according to the EEG is exceptionally entitled to feed-in management. This management, which can only be used during a transitional period until the completion of measures to expand network capacity, could already be a "first step" for a so-called Smart Grid.
The costs for the necessary IT infrastructure are also to be considered in addition to the aspects already mentioned. The expenses that are incurred for smart grids or smart meters and, further, for smart cities are a factor that should not be underestimated. Electricity grids should in the future enable coordinated management via timely bidirectional communication between generation plants, storage facilities, network components and end consumers. In addition, this must be done in an energy and cost-efficient way. There are many in-depth working groups, extracts can be made to the European platform for smart grids.
As already stated, the following considerations should be directed only at the area of decentralized generation and form a basis for further investigations into grid charges in Germany. In addition, the following considerations focus on security of supply and network charges, considering further technical and economic aspects. In the context of this contribution, the network expansion costs are not considered due to the EEG, because these can differ considerably from network operator to network operator because of the generating plants to be connected.
Economy of smart grids
Intelligent power grids represent a significant change, both from a technical and economic point of view, to the current structure of the electricity industry. Centrally controlled systems have shown that they can be considered efficient in providing generation capacity and trading in energy. Not least because of their high degree of integration, centrally controlled supply systems have also proven to be vulnerable to disruption of the system.
When security of supply is described by the availability of primary energy sources and production facilities (technical availability, e.g. maintenance and failure prone), as well as on-board transport or distribution via the networks to final customers, a larger portfolio of production facilities (considering the operational characteristics, the used primary energy sources and the plant availability) an increase of the already high security of supply by Smart Grids can be achieved. Nevertheless, it is also pointed out here that the availability of electricity grids, and here again the superposed grids, is of great importance. Only then can a high level of security of supply, system security (see, for example, transmission code), be achieved.
The functioning of a highly developed economy is inextricably linked to the uninterrupted provision of energy. The decentralized structure of smart grids can reduce the susceptibility of an energy system to disturbances. Even though consumers in Europe have become accustomed to and expect a high level of security of supply, end consumers can only react to supply interruptions to a very limited extent, or they have only limited possibilities to protect themselves against supply disruptions. Smart grids can increase the security of supply here.
Although the economic benefit of a high level of security of supply cannot be measured directly, a widespread solution approach in the literature is to use the costs of supply disruptions as an approximation and thus indirectly estimate the benefits of the quality of care. Studies show that even short supply interruptions can lead to enormous economic damage. These relate primarily to the division and are directly related to a discontinued operation. A loss of earnings, for example, through loss of production, material and storage damage, costs for overtime to compensate for the loss of time incurred, etc. can be assigned to the direct economic costs as well as damage to equipment or inventory (refrigerated goods, etc.) in households.
An unrestricted exchange of information between market players is a necessary condition for market prices to fulfil their information and steering function. In principle, the level of the market price allows conclusions to be drawn regarding the scarcity of a good, and it gives a signal for the efficient allocation of goods. Between the final consumers and the electricity producers, the price formation function in the current system is disrupted (at least in the short term), which means that prices do not provide a sufficient signal. Smart grids can better engage consumers in the market, as smart grids enable bidirectional communication between power plants, storage, network components and end users.
Real-time prices can lead to a reduction of peak loads and thus to a flexibilization and reduction of energy costs. A survey conducted in 2007 by the American grid operator PJM has revealed that a three percent reduction in demand during the 100 highest peak-load hours a year would save $ 145 million to $ 301 million on its own network. The real-time prices create the technical prerequisite for better implementation of demand-side measures. Demand side management opens completely new possibilities, since consumers can be "rewarded" for energy savings accordingly.
The existing network is for the most part not directly designed for the integration of many decentralized power generation plants. However, the expansion of renewable energy sources is a key energy and climate policy goal for Europe. Smart Grids create the technical prerequisites for integrating an annually increasing proportion of decentralized regenerative energy systems into the existing electricity system. Intelligent networks will enable improved combinability of decentralized energy generation, decentralized consumption and conventional power plants.
Production and consumption
The increasing proportion of decentralized generation can lead to a change in the amount of electricity purchased per network level, in some cases considerably. However, this has only a very small influence on network expansion and network costs. The reason for this is that network expansion is only influenced by decentralized generation if the generation plants installed in the smart grids are safely available at the time of the grid maximum load (relevant for grid planning). Reducing the burden on the upstream network will have an impact on network planning, but in the light of the supply security issues outlined above.
In this context, it is also necessary to take account of electricity consumption, which, as explained below, may also show increases. Electricity consumption will increase across Europe in the long term. Analyses show that the increase in electricity consumption correlates with gross domestic product. Although the German economy today produces significantly more energy-efficient than in the 1970s, overall energy consumption is rising, albeit at a slower rate than economic output.
Substantial components of the long-term development of electricity demand are also the partial substitution of other forms of energy and the changed consumer behaviour (for example, electrical appliances / computers per household). According to UCTE, the expected annual increase in consumption (electricity) from 2013 to 2018 can be partially assumed for Germany at 0.6%, for Austria at 1.5% and for Switzerland at 0.8%. It is also interesting in this connection that, for example, the number of computers per household on average in Switzerland increased from 0.7 to 1.14 between 2000 and 2005, an increase of approx. 63%.
Both international projects and numerous experts assume that the future requirements for the electricity systems will cause additional costs for the electricity supply system and consequently also for the customers. How much they might be depending on the system design and historical development of the electricity supply systems and their structure. Also for smart grids, additional costs for the electricity supply system are expected as the necessary capacities - both for power generation and distribution - will increase. All in all, smart grid solutions are attributed with lower total capacities than with the expansion of the power system as was previously the case. Improved alignment of generation, consumption and energy storage through smart grids will allow better utilization of the existing transmission and distribution network infrastructure.
Energy flows and network charges
Today's energy system is characterized by the fact that centralized large-scale power plants feed into high-voltage and very high-voltage grids. The electricity is transported from these networks via the distribution networks to the end users. Thus, in this "classic" system, the currents flow from the higher to the lower voltage levels. The transmission network thus serves to balance the feed-in and consumption characteristics of the power plants and end consumers. Distributed generation plants also feed energy into the distribution grids, which can thus lead to a change up to a (temporary) reversal of the energy flow at a higher feed-in as a load.
The level of network charges is influenced by both the energy-related and the performance-related cost components. In simple terms, it can be said that the network charges (with known network costs) decrease when the delivery quantities are increased (cost recovery through delivery).
The calculation of network user charges is governed by the EnWG and is subject to specification in the Electricity Fees Ordinance issued based on the EnWG. The fees charged must be calculated based on the costs of operational management that correspond to those of an efficient and structurally comparable network operator.
The determination of network charges is dealt with in the StromNEV. Thus, the network charges to be paid by the network users are independent of the spatial distance between the location of the supply of electrical energy and the place of removal. The network charges are based on the connection network level of the sampling point, the existing measuring devices at the sampling point and the respective number of hours of use thereof. The cost circulation, such as in the StromNEV, describes the distribution of the costs, starting with the maximum voltage, in each case proportionally to the downstream network or haulage level, as far as these costs are not attributable to the removal of final consumers and redistributors from the respective network or haulage level.
Regarding smart grids, it is possible to refer to the charges for decentralized feed-in according to §18 Abs. 1 StromNEV. According to this, operators of decentralized generation plants receive a fee from the operator of the electricity distribution network in whose network they feed. This fee must correspond to the grid fees avoided by the respective feed-in compared to the upstream grid or boundary levels. The fee is not granted if the electricity supply is remunerated in accordance with the EEG or the Combined Heat and Power Act and this fee includes avoided network charges. Network operators are to be equated with the operators of decentralized generation plants, if they feed into an upstream network and avoid charges in further upstream network levels there.
As already described, considering the same costs and cost overruns, a reduction in the amount of energy delivered and in the supply of services results in higher network charges. In addition, it can be assumed that network costs continue to increase with an increasing distribution of generation and higher IT infrastructure costs. Exact associated analyses are currently still in the development phase, such as also discussing the costs of smart metering.
Based on existing trends, it can be assumed that the proportion of generation plants distributed in smart grids will increase or the share of generated energy will tend to increase. This leads to a reduction of the delivery quantities from the higher network levels and thus to a redistribution of the network charges.
Smart grids will most likely reduce the energy supply from the upstream grids. A fluctuating feed-in (wind turbines, photovoltaics) requires a well-developed grid and generation infrastructure to ensure security of supply.
The payment of avoided network charges in today's form to producers is worth considering in the future. As has been shown, decentralized generation usually avoids network costs in superposed network levels. Regionally, a high proportion of decentralized generation can lead to an additional load on the transmission system.
Different approaches
How should the network connection costs continue to be handled? Different European approaches pave the way for the network operator to determine the technically possible connection point and for the plant operator to build and maintain the line up to this point at his own expense. Here, in addition to the costs for the producer, economic aspects must be considered.
Analyses show that the higher concentration of generation plants can lead to a change in energy flows, but the costs of upstream networks will remain similar (especially for stability and transit). This has the consequence that new network charges are possible, which in turn u. a. could lead to an additional burden on network users at higher voltage levels (e.g., industrial customers).
Decisive here is the question in what context the temporal course of the use of the production facilities is with the load, d. H. to what extent the application characteristics of the generation plants are oriented to the load. It is of importance, which use of the generation plants can be assumed at the time of the annual peak load relevant for grid design.
Dynamic tariffs would be a means of increasing flexibility. In terms of load management, active switching of (larger) loads by network management is undertaken. Dynamic tariffs serve u. a. directly as an impulse for the customer to decide on consumption or feed-in optimizations. In the medium term, it is expected that optimization strategies for building, energy or efficiency management will increasingly be included.
Smart grids and associated energy flow and cost changes will be incorporated into the future design of grid charges. How network regions should behave, in which there is a secure network relief due to distributed generation plants and thus a (partial) network decommissioning would have to be answered regarding the network costs. It is to be expected that, in the future, the power industry will also increasingly incorporate power autarky in the discussion, because the smart grids "act" at the distribution level and thus form a useful supplement, but they cannot replace transmission grids.