Assessing the Strategic Benefits of Distributed Generation Ownership for DNOs

The potential for distributed generation (DG) to act as an alternative distribution planning option is now well-recognised by academia and industry, and could play a significant role in electricity distribution utility operation and design. However, the unbundling requirements of European Directive 2003/54/EC, coupled with traditional network planning approaches adopted by European Distribution Network Operators (DNOs), appear to be hindering development of DG and its deployment for distribution network ancillary services. The incentives – or otherwise – that arise from alternative models of DG ownership by bundled and unbundled distribution utilities are examined here. The preference for the siting and sizing of DG installations by DNOs is simulated using a multi-year multi-period optimal power flow. Broadly based on the recent UK regulatory framework, the DG ownership issue and its potential to influence DG penetration are explored.