d8 - Cao - Costs and Benefits of DG Connections To Grid System

Costs and Benefits of DG Connections to
Grid System – Studies on the UK and

Finnish Systems
D.M. Cao, D. Pudjianto, G. Strbac,

A. Martikainen, S. Kärkkäinen, J. Farin
(Imperial College London, UK and
VTT Technical Research Centre of Finland, Finland)
With contributions from
Pablo Frias
Tomás Gómez San Román
Martin J.J. Scheepers
Research Project supported by the European Commission,

Directorate-General for Energy and Transport,
under the Energy Intelligent Europe (EIE)
Report no. Dec 2006

Acknowledgement
This document is a result of the DG-GRID research project and accomplished in
Work package 3 - Analysis of DG costs and benefits and the development of grid
business models - of the project.
The DG-GRID research project is supported by the European Commission,

Directorate-General for Energy and Transport, under the Energy Intelligent Europe
(EIE) 2003-2006 Programme. Contract no. EIE/04/015/S07.38553. The sole
responsibility for the content of this document lies with the authors. It does not
represent the opinion of the Community. The European Commission is not
responsible for any use that may be made of the information contained therein.
Project objectives
The objectives of the DG-GRID project are to:
- To review the current EU MS economic regulatory framework for electricity
networks and markets and identify short-term options that remove barriers for
RES and CHP deployment.
- To analyse the interaction between economic regulatory framework, increasing
volume share of RES and CHP and innovative network concepts in the long-term.
- To assess the effects of a large penetration of CHP and RES by analysing
changes in revenue and expenditure flows for different market actors in a
liberalised electricity market by developing a costs/benefit analysis of different
regulatory designs and developing several business models for economic viable
grid system operations by DSOs.
- To develop guidelines for network planning, regulation and the enhancement of
integration of DG in the short term, but including the opportunity for new innovative
changes in networks in the long-term
Project partners
- ECN, NL (coordinator),
- Öko-Institut e.V., Institute for Applied Ecology, Germany
- Institute for future energy systems (IZES), Germany
- RISØ National Laboratory, Denmark
- University of Manchester, United Kingdom
- Instituto de Investigación Tecnológica (ITT), University Pontificia Comillas, Spain
- Inter-University Research Centre (IFZ), Austria
- Technical Research Centre of Finland (VTT), Finland
- Observatoire Méditerranéen de l'Energie (OME), France
For further information:

Martin J.J. Scheepers
Energy research Centre of the Netherlands (ECN)
P.O. Box 1, NL-1755 ZG Petten, The Netherlands
Telephone: +31 224 564436, Telefax: +31 224 568338,
E-mail: scheepers@ecn.nl,
Project website: http://www.dg-grid.org/
2
Table of contents
Acknowledgement .........................................................................................................2
Table of contents............................................................................................................3
Glossary .........................................................................................................................5
Introduction....................................................................................................................6
1 Effect of DG connections on UK distribution network .............................7
1.1 Presentation of the case studies..................................................................7
1.2 Network description ...................................................................................8
1.3 Percentage of lines and substations to be upgraded in rural networks.....11
1.4 Upgrade cost in rural networks ................................................................13
1.5 Costs associated with active management ...............................................15
1.5.1 Energy costs due to curtailment........................................................15
1.5.2 Implementation cost..........................................................................16
1.6 Benefits of active management in rural networks....................................16
1.7 Benefits of active management in urban networks ..................................18
1.8 Effect of DG on distribution losses and distribution network capex .......20
1.8.1 Distribution losses and DG at 11kV .................................................20
1.8.2 Distribution network capex and DG .................................................23
1.9 Reduction of losses and provision of network capacity from micro
generation.................................................................................................25
1.9.1 Micro CHP ........................................................................................25
1.9.2 Photovoltaics.....................................................................................27
1.10 Summary of the effect of DG connections on UK networks ...................28
2 Effect of DG connections on Finnish distribution network .....................31
2.1 Finnish generic distribution network models...........................................31
2.1.1 0.4kV network model........................................................................31
2.1.2 20kV network models .......................................................................32
2.1.3 Load profiles .....................................................................................33
2.1.4 DG data .............................................................................................34
2.2 Description of case studies.......................................................................34
2.2.1 DG penetration levels .......................................................................34
2.2.2 Allocation of DG...............................................................................35
2.2.3 Application of suitable network models for addressing different
issues 36
2.2.4 Operation philosophies used in the studies.......................................36
2.2.5 Modelling of intermittent and non intermittent DG..........................36
2.2.6 Benefits and costs of DG connections ..............................................36
2.3 Benefits of active management ................................................................37
2.3.1 Studies on the generic rural network ................................................37
2.3.2 Studies on the generic urban network...............................................43
2.3.3 Additional cost associated with active management ........................48
2.3.4 Costs and benefits of active management on Finnish networks .......50
2.4 Effect of DG on distribution network losses............................................52
2.5 Effect of DG on distribution network Capex ...........................................57
2.6 Effect of micro or mini generation on Finnish distribution network losses
reduction and network capacity replacement...........................................60
2.7 Summary of the effect of DG connections on Finnish distribution
networks ...................................................................................................61
3
3 Summary ..................................................................................................64
4 References ................................................................................................70
4
Glossary
AM Active Management
Capex Capital expenditure
CHP Combined Heat and Power
DG Distributed Generator
DSO Distribution System Operator
F&F Fit and forget approach (or passive management approach)
FL Fault level or a short circuit capacity
GSP Grid Supply Point. A point of supply from the national transmission system
to the local system of the distribution network operator.
OH Overhead (lines)
O&M Operation and maintenance
PM Passive Management
PV Photovoltaic
UG Under-ground cables
Currencies: Great Britain Pound (£) and Euro (€) are used in this report. One GBP is
approximately equal to 1.5 €.
5
Introduction
This report describes the cost and benefits of DG to distribution networks. The
analyses are based on the reference network models and evaluation methodology
described in the report D7 “Method for Monetarisation of Cost and Benefits of DG
Options”, D. Pudjianto, D.M. Cao, S. Grenard, G. Strbac, DG-Grid, Jan 2006,
http://www.dg-grid.org/results/index.html.
Case studies were performed on the generic distribution network models which uses
UK and Finnish network parameters to evaluate the impact of DG on network losses,
voltage, fault level / short circuit power and investment schemes. The evaluation was
carried out considering different DG technologies such as PV, CHP and small hydro.
The impact of two different operating regimes namely passive and active network
management has also been assessed. The results cover UK and Finnish cases based
on rural and urban networks considering different characteristics of these two
networks. Analyses of the results are presented in this report in details.
The following three main sections of this report are summarised as below:
1. Section 2: UK distribution network model based on UK network

characteristics is described. The results of several case studies in which the
effect of DG on distribution network losses, reinforcement costs and capacity
replacement values were analysed are presented and discussed. The benefit of
active management on distribution network is evaluated comparing with
traditional passive management policy. The results of the conducted research
investigating the effect of different micro generation technologies (PV and
CHP) connected at UK lower voltage network on network losses reduction
and capacity replacement are also presented and discussed in this section.
2. Section 3: Finnish distribution network model based on Finnish network

characteristics is described. Various impacts of DG on network costs and
benefits have been investigated and analysed for Finnish network. The
benefits of small hydro power generation connected at Finnish lower voltage
network on network losses reduction and capacity replacement have also been
quantified and the results of these studies are presented and discussed in this
section.
3. Section 4: Conclusion is given deriving from the results of UK and Finnish

networks. Various key factors which influence the effect of DG on network
are summarised.
6
1 Effect of DG connections on UK distribution
network
1.1 Presentation of the case studies
The average generic distribution network which captures both rural and urban
networks characteristics and is described in report D7 has been used to model 200
Grid Supply Points (GSPs) in the UK. Driven by the need for using renewable energy
sources due to environmental concern, it can be foreseen that the penetration of DG in
the UK distribution network will increase. However, the views on the UK picture of
DG capacity, and DG location in the future are not yet clear. For that reason, four
different penetrations of DG in the UK distribution network at 11kV were studied:
2.5GW; 5GW; 7.5GW and 10GW. Considering maximum load of total system is
about 50GW, the ratio of DG’s capacity to peak load capacity are 5% 10%, 15% and
20%. It is expected that these high penetrations of DG will lead to technical problems
especially when DG is connected to a weak distribution network, which is the case of
the 11kV voltage level in the UK, particularly in rural areas. Therefore, for each of the
penetrations chosen above, four different allocation scenarios were assumed and
investigated:
• DG connected over 50% of GSPs and 2/3 of the 11kV feeders (L)
• DG connected over 50% of GSPs and 1/3 of the 11kV feeders (LM)
• DG connected over 25% of GSPs and 2/3 of the 11kV feeders (HM)
• DG connected over 25% of GSPs and 1/3 of the 11kV feeders (H)
Scenario L can be explained as follows. For 2.5 GW DG penetration, DG will be

installed in 50% of GSPs, which is around 100 GSPs considering the total GSPs are
around 200. For each GSP which has DG, DG will be connected at 2/3 of the 11 kV
feeders. Other scenarios can be explained in the similar manner using the data above.
For each scenario, active management is applied in each 11kV module of the GSP
model, and DGs are assumed to have a unity power factor. In the case of the “fit and
forget” philosophy (i.e. passive management), the distribution feeders are upgraded so
that they can accommodate the full DG capacity without encountering any voltage or
thermal issues. In the case of active management, two cases are studied for network
reinforcement:
• “Non-intermittent case”: a flat output is used for all DGs installed in the UK.
This profile was derived from the output profile of industrial medium/large
size CHP. Reinforcement of equipment attached to a generator is required if
more than 0.5% of the energy delivered is curtailed.
• “Intermittent case”: The DG profile was derived from the wind generation
output profile which has around 30% load factor. It is observed that the energy
curtailed is equal to 10% of the energy curtailed in the non-intermittent case.
Investment is required if more than 2.5% of the energy delivered is curtailed.
These two cases are described in this section as non-intermittent and intermittent
generation respectively.
7
The study compares the incremental cost of upgrading feeders and substations under
the “fit and forget” design and under active management of the network. However,
implementing the latter comes at a cost. Therefore, under active management, to the
incremental cost of upgrading feeders and substations must be added the cost of
generation curtailment, and also the cost of implementing active management which
includes investment cost in voltage measurement units and investment cost in control
and communication systems.
Even though the average GSP network was used, the costs due to voltage rise and
thermal problems are defined as the costs in rural system because these problems
occur typically in the weak 11kV rural feeders characterised by long and thin
diameter of overhead line sizes. On the other hand, the costs associated with fault
level issues are linked with urban networks where short cables are required.
1.2 Network description

The generic distribution network models used for the different case studies presented
in this chapter mimic the average characteristics of one GSP UK distribution networks
in general with regard to the number, the length and the impedance of circuits and
also the capacity and characteristics of transformers at each voltage level. The model
is composed of a single 132kV module, one kind of 33kV module, two kinds of 11kV
modules, a high loaded module and a low loaded module, and four different 0.4kV
modules.
The GSP substation is composed of 2×240MVA transformers. Eight 132kV overhead

lines with an average length of 17 km connect the GSP substation to the 33 kV
modules which are composed of 2×65MVA transformers. Each 33kV module
includes 12 overhead lines of different lengths, varying between 10 and 20km, and
connected to both high loaded and low loaded 11kV modules.
The low loaded 11kV modules are composed of 2×7.5MVA transformers, whereas
the high loaded 11kV modules are composed of 2×17.5MVA transformers. All these
modules are built with eight 11kV overhead lines of different lengths, varying
between 8 km and 25 km, and different loading conditions.
The 0.4kV modules are designed as follows: the first one has a transformer capacity
of 100kVA and two feeders with different loadings, the second one has a transformer
capacity of 250kVA and two feeders with different loadings, the third one has a
transformer capacity of 250kVA with four feeders connected, while the last one has a
transformer capacity of 630kVA and four feeders connected. The average length of
the 0.4 kV feeders is 0.35km, and in all cases the load and the distribution
transformers are uniformly distributed along the 0.4kV and 11kV feeders respectively.
Urban and rural networks tend to have different network characteristics. In order to be
comparable, it is supposed that both networks are composed of the same number of
circuits and transformers at each voltage level and of the same loading conditions as
the current average GSP networks. Rural and urban network models data are listed in
Table 1-1 to Table 1-5, where OH and UG for circuit type stand for overhead and
underground respectively.
8
Table 1-1 Number and capacity of transformers in different voltage level subsections
Voltage Number × capacity of transformers
level Model 1 Model 2 Model 3 Model 4
11kV/0.4kV 200 x 100kVA 250 x 250kVA 250 x 250kVA 250 x 630kVA
33kV/11kV 12 x 2 x 7.5MVA 12 x 2 x 17.5MVA
132kV/33kV 4 x 2 x 66MVA
GSP substation 1 × 2 × 240MVA
Table 1-2 Circuit parameters for UK 0.4kV network model

0.4kV Size (mm2) Length(km) % of load Load distribution 1
Circuit Type
Module Rural Urban Rural Urban Rural Urban Rural Urban
Module Circuit 1 UG 50 70/50 0.5 0.1 25 40 L.I. U.D.
1 Circuit 2 UG 185/95 95/50 1 0.4 75 60 U.D. U.D.
Module Circuit 1 UG 95 185/95 0.5 0.1 25 45 L.I. U.D.
2 Circuit 2 UG 300 300/95 1 0.4 75 55 U.D. U.D.
Circuit 1 UG 50 50 0.5 0.1 10 15 L.I. U.D.
Module Circuit 2 UG 185/95 95/50 1 0.4 20 20 U.D. U.D.
3 Circuit 3 UG 185/95 185/50 0.5 0.1 30 30 L.I. U.D.
Circuit 4 UG 300/95 185/95 1 0.4 40 35 U.D. U.D.
Circuit 1 UG 185/50 185/70 0.5 0.1 10 15 L.I. U.D.
Module Circuit 2 UG 300/95 300/95 1 0.4 20 20 U.D. U.D.
4 Circuit 3 UG 300/95 300/95 0.5 0.1 30 30 L.I. U.D.
Circuit 4 UG 300 185/95 1 0.4 40 35 U.D. U.D.
1
Load distribution types: U.D: Uniformly distributed; L.I.: Linearly Increasing
9
Table 1-3 Circuit parameters for UK 11kV network model
Load
11kV Type Size(mm2) Length(km) % of load
Circuit distribution
module
Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban
Circuit 1 OH UG 50 70/50 40 5 5 14 L.I. U.D.
2
Circuit 2 OH UG 300/95 50 40 5 20 11 L.I. U.D.
Circuit 3 OH UG 50 70/50 30 5 5 14 U.D. U.D.
Module Circuit 4 OH UG 300/95 50 30 5 20 11 U.D. U.D.
1 Circuit 5 OH UG 50 70/50 15 2.5 5 14 L.I. U.D.
Circuit 6 OH UG 300/50 50 15 2.5 20 11 U.D. U.D.
Circuit 7 OH UG 50 70/50 10 2.5 5 14 U.D. U.D.
Circuit 8 OH UG 300/50 50 10 2.5 20 11 L.I. U.D.
Circuit 1 OH UG 95/50 185/50 40 5 5 14 U.D. U.D.
Circuit 2 OH UG 300 185/50 40 5 20 11 U.D. U.D.
Circuit 3 OH UG 95/50 185/50 30 5 5 14 L.I. U.D.
Module Circuit 4 OH UG 300/95 185/50 30 5 20 11 U.D. U.D.
2 Circuit 5 OH UG 95/50 185/50 15 2.5 5 14 L.I. U.D.
Circuit 6 OH UG 300/95 185/50 15 2.5 20 11 L.I. U.D.
Circuit 7 OH UG 95/50 185/50 10 2.5 5 14 U.D. U.D.
Circuit 8 OH UG 300/50 185/50 10 2.5 20 11 U.D. U.D.

33kV Size(mm2) Length(km)
Type
Module Rural Urban Rural Urban
Circuit 1 OH 300 300/185 20 7
Circuit 2 OH 185 185 20 7
Circuit 3 OH 300 300/185 14 5
Circuit 4 OH 185 1852 14 5
Circuit 5 OH 300 185 8 3
Circuit 6 OH 185 185 8 3

132kV Size(mm2) Length (km)
Type
Module Rural Urban Rural Urban
Circuit 1 OH 300 300 17 5
Circuit 2 OH 300 300 17 5
Circuit 3 OH 300 300 17 5
Circuit 4 OH 300 300 17 5
10
It is assumed that all demand customers are connected at 0.4kV and is composed of
70% of residential customers without electrical heating, 10% of residential customers
with electrical heating, 10% of commercial customers and 10% of industrial
customers. The annual total load has a maximum of 225MW, a load factor of 0.55,
and a power factor of 0.98. Figure 1-1 below shows typical annual load profiles in
nine characteristic days used in the studies. Hourly and seasonal load variations were
captured and used for load flow analysis. This figure is obtained by aggregating
different type of loads, i.e. residential, industrial and commercial loads in the network.
Distribution of the loads along feeders was also modelled.
250
Winter days
200
Winter Saturday
Winter Sunday
150 Autumn/Spring days
MW Load
Autumn/Spring days
100 Autumn/Spring Sunday
Summer days
Summer Saturday
50
Summer Sunday
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Tim e
Figure 1-1 Annual load profiles
1.3 Percentage of lines and substations to be upgraded in rural

networks
Figure 1-2 to Figure 1-4 present the percentage of 11kV and 33kV lines and 33/11kV
substations that need to be upgraded for the different penetration scenarios of DG and
for both types of management philosophy: “fit and forget” (F&F) and active
management (AM). The case of 2.5GW penetration is not presented since none of the
penetration scenarios of DG triggers any reinforcement costs.
For capacities of 5GW and 7.5GW of DG installed over 50% of the GSPs in the UK,
less lines require upgrade when DGs are allocated along 2/3 of the circuits than over
1/3 of the circuits, because the capacity of DG installed per line in the first case is low
enough to not require reinforcement, whereas when the concentration increases a
larger number of reinforcements are required.
On the other hand, as the installed capacity of DG increases to 10GW in the UK, it is
the opposite case. The capacity of DG installed per line is such that most of the lines
where DG is installed require an upgrade, whatever the penetration density of DG.
The higher the density of DG as in scenario H, the lower the number of 11kV lines
which need to be upgraded. For the same reasons, when DG is installed over 50% of
the GSPs, the number of lines to be reinforced for any penetration of DG is higher for
high-density allocation of DG.
Similar comments can be made for 33/11kV substations and 33kV lines: for high
11
penetration of DG, the higher the generators concentration in the GSP network, the
lower the number of equipment to upgrade. However, the capacity upgrade required is
higher for high density of DG and the costs associated are higher, as will be shown in
the next sub-section.
6
Percentage of scheme to be replaced (%)
0
L (F&F) L (AM) LM LM HM HM H (F&F) H (AM)
(F&F) (AM) (F&F) (AM)
Penetration scenario (Management policy)
11kV lines 33/11kV transformers 33kV lines
Figure 1-2 Percentage of lines and substations to be upgraded in the UK for a DG

penetration of 5GW and for different penetration scenarios
9
8
7
6
5
4
3
2
1
0
(F&F) (AM) (F&F) (AM)

penetration of 7.5GW and for different penetration scenarios
12
18

16
14
12
10
8
6
4
2
0
(F&F) (AM) (F&F) (AM)

penetration of 10GW and for different penetration scenarios
The results obtained with this study also indicate that reinforcement of 11kV lines is
driven by voltage constraints as 11kV feeders are characterised by long overhead lines,
while the reinforcement of 33/11kV substations and 33kV lines is driven by thermal
constraints. As described in the figures above, active management has a positive
impact on the percentage of 11kV lines that need upgrading.
1.4 Upgrade cost in rural networks

Figure 1-5 to Figure 1-7 illustrate the total UK upgrade capital costs disaggregated per
voltage level and per scenario, and for both passive and active management. They
reveal that upgrading 11kV lines is the main cost for all scenarios of penetration of
DG. Nevertheless, the cost of upgrading 33/11kV substations increases with the
capacity and the density of penetration of DG, and forms a large part of the
reinforcement cost in scenario H, and for a penetration of 10GW. These figures also
demonstrate how the upgrade costs can be reduced by using active management in
11kV modules.
Since the unit cost of various assets is different, it is possible that the upgrade cost for
different cases are different although the percentage of circuits to be upgraded in the
associated cases are the same as presented in Figure 1-2-Figure 1-4. It can be
concluded that if passive approach remains to be used, it will drive more capital
investment and increase the cost for integrating DG.
13
200
180
160
140
Upgrade cost (M£)
120
100
80
60
40
20
0
(F&F) (AM) (F&F) (AM)
Figure 1-5 Upgrade costs for a DG penetration of 5GW

300
250
Upgrade cost (M£)
200
150
100
50
0
L (F&F) L (AM) LM LM HM HM H H (AM)
(F&F) (AM) (F&F) (AM) (F&F)
Figure 1-6 Upgrade costs for a DG penetration of 7.5GW
14
450
400
Upgrade cost (M£) 350
300
250
200
150
100
50
0
L (F&F) L (AM) LM LM HM HM H H (AM)
(F&F) (AM) (F&F) (AM) (F&F)
Figure 1-7 Upgrade costs for a DG penetration of 10GW

In order to determine the operation and maintenance (O&M) cost, 1.4% is applied as
the standard annual O&M rate at extra high voltage levels (United Utilities, 2005).
This value is assumed for assets at each voltage level for UK distribution networks.
Using 7% rate of return and 20 years capital investment time scale, Table 1-6 shows
the annuatised upgrade costs and O&M costs for UK rural networks with various DG
penetration levels and management policies considering intermittent (I) and non-
intermittent (NI) cases.
Table 1-6 Annuatised reinforcement cost and O&M cost in UK rural network
(M£ /year)
DG L LM HM H
Cost
capac AM AM AM AM AM AM AM AM
type PM PM PM PM
ity NI I NI I NI I NI I
2.5 Reinf 0 0 0 0 0 0 0 0 0 0 0 0
GW O&M 0 0 0 0 0 0 0 0 0 0 0 0
Reinf 0 0 0 11.89 0 0 11.89 0 0 22.47 9.06 7.93
5GW
O&M 0 0 0 0.17 0 0 0.17 0 0 0.31 0.13 0.11
7.5 Reinf 9.44 0 0 27.85 4.63 4.06 27.47 4.53 3.96 33.89 25.49 23.88
GW O&M 0.13 0 0 0.39 0.06 0.06 0.38 0.06 0.06 0.47 0.36 0.33
10 Reinf 22.94 0 0 45.5 18.12 15.95 44.18 16.99 15.01 53.05 37.19 35.49
GW O&M 0.32 0 0 0.64 0.25 0.22 0.62 0.24 0.21 0.74 0.52 0.50
1.5 Costs associated with active management

1.5.1 Curtailment cost
The first cost associated with active management is the cost of curtailing output of
distributed generator, in order not to violate voltage or thermal constraints in times of
low demand. This cost can be associated to the opportunity lost of DG due to network
constraints. Figure 1-8 shows the energy curtailed for each scenario of non-
intermittent DG penetration. The cost associated is obtained by multiplying the
amount of energy curtailed by the cost of electricity, which is assumed to be
20£/MWh in this study.
15
200
180
Energy custailed (GWh/year 160

140
120
100
80
60
40
20
0
2.5 5 7.5 10
DG penetration (GW )
L LM HM H
Figure 1-8 Energy curtailed for non-intermittent generation

1.5.2 Implementation cost
The second cost associated with active management is its implementation cost.
Implementation of generation curtailment necessitates the installation of voltage
measurement schemes at the generator point of connection as described in (Liew, S.N.,
2002). A reliable communication link between the terminal of the DG and the DSO
centre is also required. Besides, in a coordinated area-based voltage control,
measurements and communication are also required between a 33/11kV substation
and the DSO centre. In this study we suppose that the cost of active management is
flat irrespective of the considered level of DG penetration. This is because the cost of
active management is assumed for simplicity to be fixed, irrespective of the number
of feeders with voltage rise problems as long as there is at least one problem feeder.
In rural areas, the cost of implementing active management is therefore supposed to
be £10,000 per DG. In urban areas, the cost of implementing active management is
assumed £100,000 per substation. However, in practice, the cost of active
management has variable cost components and depending on the number of problem
feeders, the cost of enabling active management varies.
1.6 Benefits of active management in rural networks

Table 1-7 and Figure 1-9 compare the range of reinforcement and capitalised
operation costs for different penetrations of DG in the UK distribution between
passive management and active management with all its associated costs described
above: energy reduction cost due to curtailment, cost of implementing active
management and cost of reinforcement if required. In Table 1-7, the first row in the
active management column corresponds to the reinforcement costs for the intermittent
case while the second row corresponds to the non-intermittent case. The underlined
figures correspond to the cost of implementing active management.
16
Table 1-7 Reinforcement cost (RC) of upgrading feeders and substations in rural
system (in M£) for Passive (PM) and Active (AM) management (considering the
intermittent and non-intermittent cases) and cost of implementing (CoI) active
management
Scenario ⇒ L LM HM H
DG capacity PM AM PM AM PM AM PM AM
⇓ RC RC CoI RC RC CoI RC RC CoI RC RC CoI
0 0 0 0
2.5GW 0 0 0 0
0 0 0 0
0 0 0 84
5GW 0 126 80 126 80 238 40
0 0 0 96
0 43 42 253
7.5GW 100 80 295 80 291 80 359 40
0 49 48 270
0 169 159 376
10GW 243 160 482 80 468 80 562 40
0 192 180 394
1400
1200
1000
Cost (M£)
800
600
400
200
0
2.5 5 7.5 10
Installed capacity (GW)
Passive rural network Active rural network
Figure 1-9 Ranges of reinforcement cost of upgrade in rural areas
The benefits of active management are clearly illustrated in Figure 1-9 for each
penetration of DG. For an installed capacity of 5GW, up to 50% of the cost of
upgrading the system could be saved by applying active management, while this
figure varies between 15 and 40% for a penetration of 10 GW.
17
Table 1-7 also suggests that reinforcement costs required in the intermittent case are
smaller than for the non-intermittent case. This is due to the lower occurrence of the
worst-case situation of high output of DG at times of low demand in the intermittent
case.
1.7 Benefits of active management in urban networks

In most cases a rise in system fault level requires the switchgear to be replaced with
equipment of a higher fault rating. In the developed UK model, the entire switchboard
of a substation is replaced if the fault rating at that location is exceeded. The costs of
new switchboards used for each voltage level are presented in Table 1-8.
Table 1-8 New switchboard cost

Substation GSP 132/33kV 33/11kV
New switchboard cost (£) 3,146,000 1,079,000 497,350
Average system fault levels are assumed at each voltage level; 350MVA at 11kV and
1,000MVA at 33kV, and two different fault level headrooms available at each voltage
level are examined. The headroom is used to determine how much DG can be added
to various parts of the DSO networks before switchgear fault ratings are exceeded.
The two following cases are investigated:
• 0% headroom; in this case the introduction of DG at 11kV requires the upgrade

of the switchgear in the 33/11 kV substation.
• 10% headroom; in this case the introduction of DG at 11kV requires the upgrade
of the switchgear in the 33/11 kV substation only if its contribution to fault level
is superior to 10% of the switchgear rating.
Table 1-9 and Figure 1-10 provide the range of full cost of upgrading switchboards in
all the penetration scenarios of DG in urban systems. For active management, the cost
of implementing an active managed network is added to the cost of upgrading
switchboards. As for rural systems, the benefits of active management can be clearly
identified. For low DG penetration, more than half of reinforcement costs could be
saved by applying active management.
18
Table 1-9 Reinforcement cost of switchboards (RC) for two different headrooms for
passive (PM) and active (AM) management in urban system (in M£) and cost of
implementing (CoI) active management
DG PM AM PM AM PM AM PM AM
Head-
capacity RC RC CoI RC RC CoI RC RC CoI RC RC CoI
room
⇓
0% 796 0 398 0 398 0 398 0

2.5GW 320 160 160 80
10% 0 0 0 0 0 0 0 0
0% 796 0 398 0 398 0 398 0
5GW 320 160 160 80
10% 0 0 0 0 0 0 398 0
0% 796 0 398 0 1227 431 415 415
7.5GW 320 160 160 80
10% 0 0 398 0 1227 431 415 415
0% 796 0 398 0 1227 431 1012 1012
10GW 320 160 160 80
10% 0 0 398 0 1227 431 1012 1012
1400
1200
1000
Cost (M£)
800
600
400
200
0
2.5 5 7.5 10
Installed capacity (GW)
Passive urban network Active urban network
Figure 1-10 Ranges of reinforcement costs in urban areas

Using the same assumption as for rural network, 1.4% is applied as the standard
operation and maintenance (O&M) rate. The annuatised upgrade costs and O&M cost
for urban network with 0% and 10% headrooms are listed in Table 1-10 and
Table 1-11.
19
Table 1-10 Annuatised reinforcement cost and O&M cost in urban network with 0%
headroom (M£/year)
Cost
GW L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM)
type
Reinf 75.14 0 37.57 0 37.57 0 37.57 0
2.5
O&M 1.05 0 0.53 0 0.53 0 0.53 0
Reinf 75.14 0 37.57 0 37.57 0 37.57 0

5
O&M 1.05 0 0.53 0 0.53 0 0.53 0
Reinf 75.14 0 37.57 0 115.82 40.68 39.17 39.17

7.5
O&M 1.05 0 0.53 0 1.62 0.57 0.55 0.55
Reinf 75.14 0 37.57 0 115.82 40.68 95.53 95.53

10
O&M 1.05 0 0.53 0 1.62 0.57 1.34 1.34
headroom (M£/year)
Cost
GW L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM)
type
Reinf 0 0 0 0 0 0 0 0
2.5
O&M 0 0 0 0 0 0 0 0
Reinf 0 0 0 0 0 0 37.57 0
5
O&M 0 0 0 0 0 0 0.53 0
Reinf 0 0 37.57 0 115.82 40.68 39.17 39.17

7.5
O&M 0 0 0.53 0 1.62 0.57 0.55 0.55
Reinf 0 0 37.57 0 115.82 40.68 95.53 95.53

10
O&M 0 0 0.53 0 1.62 0.57 1.34 1.34
1.8 Effect of DG on distribution losses and distribution network

capex
1.8.1 Distribution losses and DG at 11kV
Quantifying the variation in annual energy losses due to the introduction of DG with
constant output in the UK distribution network is the objective of this section. Due to
lacking the number of GSPs for rural and urban networks for the UK, the
corresponding results shown below were conducted using average network model,
which captures the average characteristics of the UK rural and urban distribution
networks, rather than rural and urban network models themselves. And the results are
believed to be appropriate enough to show the effect of DG on losses. Since losses at
0.4 kV are not influenced by the connection of DG at 11kV, the different results and
figures of this section present the annual energy losses in the entire UK distribution
network apart from the low voltage level.
The presence of DG at 11kV changes the flow patterns and therefore the losses
incurred in transporting electricity through transmission and distribution networks.
The first thought is that DG contributes to power loss reduction as the generation
energy flow is generally against the major net flow. This is, however, normally but
not necessarily true. The impact of DG on losses depends on the penetration and the
location of DG in the network as described in Figure 1-11 to Figure 1-14. Low
penetration of DG reduces the losses, as the generation is absorbed by local load,
20
which then reduces the flow in the 11kV feeder and in the voltage levels above.
However, as the penetration of DG increases, generation starts to exceed local
demand, particularly in low loaded lines and at time of low demand, leading to a
reverse flow in the 11kV feeders. This reverse flow increases the losses at 11kV and
in some cases at higher voltage levels too.
Figure 1-11 describes the behaviour of annual energy losses for the penetration
scenario where DG is allocated to 2/3 of the 11 kV circuits of 50% of the GSPs in the
UK. In that case, for any penetration of DG, the losses in the UK distribution network
are lower than when no DG is connected to the network, and a minimum in energy
losses is obtained for a DG penetration of 5GW. For low penetration of DG, active
management is not required since the system does not need any reinforcement.
However for high penetration of DG, the use of active management tends to increase
the losses since feeders have smaller sizes than for passive management. For a
penetration of 10GW, the corresponding increase in cost of losses is about 3M£/year
in the UK network assuming the electricity cost is 20£/MWh. 2
3.5
2.5
Losses (%)
1.5
0.5
0
0 2.5 5 7.5 10
Penetration of DG (GW)
Passive management Active management
Figure 1-11 Losses in UK’s distribution network (except for LV) for scenario L
Figure 1-12 and Figure 1-13 represent the losses for the penetration scenarios where
DG is allocated to 1/3 of the 11 kV circuits of 50% of the GSPs in the UK and DG is
allocated to 2/3 of the 11 kV circuits of 25% of the GSPs in the UK respectively. The
comments are generally similar to before: the losses for low penetrations of DG
(2.5GW and 5GW) are smaller than if no DG is connected to the network. However,
as the penetration increases the losses tend to increase in the UK distribution network.
Moreover, the losses in these two cases are higher than in the case with a less dense
penetration of DG. Similarly to the previous case, active management has a negative
impact on losses: energy losses increase by about 15% in the case of high penetration
of DG when active management is applied. However the corresponding increases in
cost of losses (about 15M£/year for a penetration of 10GW in scenario HM) do not
question the benefits of applying active management.
2
Cost of losses is calculated from the annual energy losses multiplied by the specified energy cost.
21
5
4.5
4
3.5
Losses (%)
3
2.5
2
1.5
1
0.5
0
0 2.5 5 7.5 10
Figure 1-12 Losses in UK’s distribution network (except for LV) for scenario LM
6
4
Losses (%)
0
0 2.5 5 7.5 10
Figure 1-13 Losses in UK’s distribution network (except for LV) for scenario HM
Figure 1-14 depicts the losses for the penetration scenario where DG is allocated to
1/3 of the 11 kV circuits of 25% of the GSPs in the UK, which corresponds to a high-
density penetration. In this scenario, any penetration of DG increases the losses in the
network. This rise can reach 100% when 10GW of DG is connected to the network.
22
10
9
8
7
Losses (%)
6
5
4
3
2
1
0
0 2.5 5 7.5 10
Figure 1-14 Losses in UK’s distribution network (except for LV) for scenario H
1.8.2 Distribution network capex and DG

Because distributed generators are located near to consumers, the net demand to be
supplied from transmission and distribution networks can decrease, postponing the
need to reinforce the system in case of load growth or to reduce the investment
required in case of equipment replacement. (Mendez, V.H., et al., 2003) assessed the
investment deferral in radial distribution networks with distributed generation based
on a part of a semi-rural distribution model. However the methodology presented
above enables us to study the impact of DG with a flat output on investment deferral
in the entire distribution network of the UK for different penetration scenarios (and
therefore on security). Table 1-12 presents the maximum flow in the Grid Supply
Point of networks where DG is connected. The low-density penetration of DG
corresponds to the scenarios L and LM presented above while the high density
corresponds to the scenarios HM and H. The maximum flow when no DG is
connected to the network is 225MVA in the GSP. The DSO could therefore benefit in
the case of a low-density penetration of DG, as the capacity required in the GSP is
2×198MVA instead of 2×225MVA. The minimum flow is obtained for a high density
penetration of 7.5GW of DG.
It is interesting to note that for high and dense penetrations of DG, the maximum flow
in GSPs occurs in times of low demand when power is exported from the distribution
network to the transmission network.
Similarly, the introduction of DG at 11kV in the network changes the flow in the
132/33kV substations. Table 1-13 describes the maximum flow in each 132/33kV
substation when DG is introduced at 11kV. When no DG is installed in the network,
the maximum flow is 55MVA.
23
Table 1-12 Maximum flow (in MVA) in GSP substations for GSPs with DG
Maximum flow (in MVA) in GSP substations
DG scenario
Low density High density
DG penetration
2.5GW 198 172
5GW 172 123
7.5GW 148 95
10GW 122 145
Table 1-13 Maximum flow (in MVA) in 132/33kV substations for GSPs with DG
Maximum flow (in MVA) in 132/33kV
substations
DG scenario
DG penetration
2.5GW 49 43
5GW 43 30
7.5GW 36 23
10GW 30 35
Using the figures in Table 1-12 and Table 1-13, one can derive the potential value (in
£M) of DG in replacing distribution network assets in the entire UK. These potential
benefits are presented in Table 1-14 in capitalised value.
Table 1-14 Potential value of DG in replacing distribution network assets (£M)
Replacement value of DG (£M)

DG scenario
DG penetration
2.5GW 186.24 190.12
5GW 380.24 386.06
7.5GW 582.00 500.52
10GW 776.00 304.58
For low densities of DG penetration at 11kV, the benefits obtained in asset

replacement cost increase with the penetration of DG. However the high density
scenario, combined with very high penetration of DG tends to decrease these benefits
since a high capacity is required at the substations for the upward transfer of power
from the 11kV voltage level to the transmission network in times of low demand.
24
1.9 Reduction of losses and provision of network capacity from
micro generation
The Engineering Recommendation G83/1 (ER G.83/1, 2003) defines the capacity
constraints recommendations for the connection of small scale embedded generators
in parallel with public low-voltage distribution networks up to 16A per phase,
equating 3.68kVA for a 230V single phase connection. Electricity from micro-
generation is both produced and consumed on the premises by technologies such as
micro wind, micro hydro, fuel cells, photovoltaics (PV) or micro combined heat and
power (micro CHP). In this research only micro CHP and photovoltaics were studied
because typical daily and seasonal energy outputs can be used for these two
technologies. In the working paper (Distributed Generation Coordination Group, 2004)
the different economic benefits delivered by micro generation are summarised as
follows:
• It will reduce emissions of COx, SOx, NOx and particulates
• It will reduce the total capacity needed within networks
• It will reduce the need for peak provision in electricity networks
• It will reduce power system losses
• It will deliver major energy efficiency gains
• It will reduce the amount of large-scale centralised generating capacity
The results presented below quantify the reduction of distribution energy losses and
the reduction in total capacity needed for different penetration scenarios of micro
CHP and PV in the UK distribution network. Therefore cases studies with
2.5%/5%/7.5%/10% of all UK customers with micro generation over 20%/50% of
GSPs in the UK are displayed.
1.9.1 Micro CHP
Combined Heat and Power (CHP) is the simultaneous production of electrical power
and useful heat. In the case the electrical power of domestic micro CHP is consumed
inside the host premises although any surplus or deficit is exchanged with the utility
distribution system. The heat generated by micro CHP is used for space heating inside
the host premises. Therefore the electrical energy output of micro CHP is driven by
the heat requirements of consumers. Figure 1-15 illustrates the normalised generation
profile of micro CHP used in this study where it was assumed the output of micro
CHP is nil during the summer. Furthermore, it was assumed that 25% of the
customers with micro CHP had a technology with a capacity of 3kW and 75% with a
capacity of 1.1kW.
25
1.2
Micro CHP electric generation 0.8

(pu)
0.6
0.4
0.2
0
0 5 10 15 20
Time (Hr)
Figure 1-15 Normalised output of micro CHP
Table 1-15 gives the annual energy losses and the maximum flow entering in the
distribution network for different proportion of customers with micro CHP allocated
to 50% of the GSPs in the UK, while Table 1-16 gives the same features when micro
CHP is allocated amongst only 20% of the GSPs in the UK. The increase in the
proportion of customers with micro CHP leads to a significant reduction in energy
losses (from 6.1% to 4.39% in the average network). This reduction is important
because the maximum output of micro CHP occurs at time of high customers demand
decreasing the transfer of power in the distribution network in times of high demand.
For the same reasons the maximum flow entering the GSP network decreases as the
capacity of micro CHP increases up to a point where the maximum flow entering the
network occurs in at a time when no electricity is produced by micro CHP (like in
summer for instance). Similarly to the comments made in section 2.8.2, and since
micro CHP generation coincides with peaks of demand, adding micro CHP generation
capacity at the low voltage end of the power system defers or removes the need for
new network capacity and reduce the utilisation of existing network. This leads
therefore to benefits to DSOs.
Table 1-15 Losses and maximum flow when micro CHP is allocated to 50% of GSPs
in the UK
Proportion of Losses in GSP with generation (%)/Losses in the Maximum
customers entire UK network (%) flow entering
Average Rural network Urban network the GSP (in
network MVA)
0% 6.1 8.69 4.47 251.3
2.5% 5.6 / 5.85 7.92 4.12 228.7
5% 5.16 / 5.63 7.24 3.8 206.5
7.5% 4.75 / 5.42 6.63 3.52 187.9
10% 4.39 / 5.24 6.09 3.36 187.9
26
Table 1-16 Losses and maximum flow when micro CHP is allocated to 20% of GSPs
in the UK
Proportion of Losses in GSP with generation (%)/Losses in the Maximum flow
customers entire UK network (%) entering the
Average Rural network Urban network GSP (in MVA)
network
0% 6.1 8.69 4.47 251.3
2.5% 4.93 / 5.86 6.92 3.72 195.4
5% 4.05 / 5.69 5.62 3.15 187.9
7.5% 3.48 / 5.57 4.78 2.78 187.9
10% 3.18 / 5.51 4.35 2.58 187.9
1.9.2 Photovoltaics
Photovoltaic generation corresponds to the direct conversion of sunlight to electricity.
Interest is now focused on incorporating the photovoltaic modules into buildings and
houses. Thus these small PV installations would be connected directly into customers’
circuits and so interface with the low-voltage distribution network. Figure 1-16
describes the normalised energy profile used in this study based on (Jenkins, N., 1995)
to model the output of PV. It is assumed that customers would have a module with a
capacity of 1kW.
1.2
Normalised electric generation of
0.8
0.6
PV (pu)
0.4
0.2
0
0 5 10 15 20
Time (Hr)
Summer Autumn/Spring Winter
Figure 1-16 Normalised output of PV
Similarly to Table 1-15 and Table 1-16 for micro CHP, Table 1-17 and Table 1-18
describe the distribution losses for different penetrations of PV at 0.4kV. The impact
of PV on losses and on the provision of network capacity is less significant then the
impact of micro CHP. Indeed, PV in the UK produce electric energy in times of low
demand (during summer daytime), but not during peak demands such as the evening
of winter weekdays. Therefore the maximum flow entering the distribution network is
not affected by the installation of PV (251.3MVA in this example), and even if losses
decrease with higher penetrations of PV, the reduction is not significant.
27
Table 1-17 Losses and maximum flow when PV is allocated to 50% of GSPs in the
UK
customers with entire UK network (%) flow entering
PV Average Rural network Urban network the GSP (in
network MVA)
0% 6.1 8.69 4.47 251.3
2.5% 5.93 / 6 8.39 4.33 251.3
5% 5.74 / 5.92 8.12 4.2 251.3
7.5% 5.57 / 5.83 7.86 4.09 251.3
10% 5.41 / 5.75 7.62 3.98 251.3
Table 1-18 Losses and maximum flow when PV is allocated to 20% of GSPs in the
UK
customers with entire UK network (%) flow entering
PV Average Rural network Urban network the GSP (in
network MVA)
0% 6.1 8.69 4.47 251.3
2.5% 5.65 / 6.01 7.98 4.15 251.3
5% 5.26 / 5.93 7.4 3.88 251.3
7.5% 4.95 / 5.87 6.93 3.65 251.3
10% 4.71 / 5.82 6.58 3.5 251.3
1.10 Summary of the effect of DG connections on UK networks

Corresponding to Table 1-7 and Table 1-9, Table 1-19 and Table 1-20 show the
incremental cost (£/kW) for network assets reinforcement in rural and urban networks
respectively. The second columns in active management case show the incremental
implementation cost of active management. In Table 1-19 for rural networks, the first
row in active management case is for intermittent case and the second row is for non-
intermittent case. In Table 1-20 for urban networks, the first row corresponds to 0%
headroom case and the second row corresponds to 10% headroom case.
From Table 1-19 and Table 1-20, we can see that for each DG capacity, in the low
and medium DG penetration density cases, the incremental cost can be reduced
significantly if active network is applied. While with high penetration level, e.g. for
10GW H penetration scenario, the incremental cost is similar or larger in active
management comparing with passive management taking into account the
implementation cost of active management.
28
Table 1-19 Incremental cost for assets reinforcement with passive (PM) and active
(AM) management for various DG penetration scenarios for rural networks (£/kW)
Scenario L LM HM H
⇒
capacity
⇓ IC IC CoI IC IC CoI IC IC CoI IC IC CoI
0 0 0 0
2.5GW 0 0 0 0
0 0 0 0
0 0 0 0 16.8
5GW 0 25 16 25 16 48 8
0 0 0 0 19.2
0 5.7 5.6 33.7
7.5GW 13.3 10.7 39.3 10.7 39 10.7 47.9 5.3
0 6.5 6.4 36
0 16.9 15.9 37.6
10GW 24.3 16 48 8 47 8 56 4
0 19.2 18 39.4
Table 1-20 Incremental cost for assets reinforcement with passive (PM) and active
(AM) management for various DG penetration scenarios for urban networks (£/kW)
capacity Head-
⇓ room IC IC CoI IC IC CoI IC IC CoI IC IC CoI
0% 318.4 0 159.2 0 159 0 159.2 0
128 64 64 32
2.5GW 10% 0 0 0 0 0 0 0 0
0% 159.2 0 79.6 0 79.6 0 79.6 0
64 32 32 16
5GW 10% 0 0 0 0 0 0 79.6 0
0% 106.1 0 53.1 0 164 57.5 55.3 55.3
42.7 21.3 21.3 10.7
7.5GW 10% 0 0 53.1 0 164 57.5 55.3 55.3
0% 79.6 0 39.8 0 123 43.1 101.2 101
32 16 16 8
10GW 10% 0 0 39.8 0 123 43.1 101.2 101
Table 1-21 gives the incremental benefit of DG on network capacity replacement, the
value is on average around 76 £/kW for all the cases except the case of 10GW
penetration with high density level due to large reversed power flow.
Table 1-21 Incremental replacement benefit of DG (£/kW)

DG scenario Incremental replacement value of DG
DG penetration Low density High density

2.5GW 74.496 76.048
5GW 76.048 77.212
7.5GW 77.6 66.736
10GW 77.6 30.458
Incremental value of Micro-CHP on network capacity replacement is shown as Table

1-22. The value is from 23.81£/kW to 83.60£/kW. Since the reason mentioned in
29
section 2.9.2, the maximum power flow does not change with PV installation to the
network for each scenario. The incremental value of PV on network capacity
replacement is zero and the table is ignored here.
Table 1-22 Incremental benefit of Micro-CHP on replacing distribution network

assets (£/kW)
Incremental benefit (£/kW)

Proportion of
customers Generator allocated Generator allocated
to 50% of GSPs to 20% of GSPs
2.5% 78.94 83.60
5% 82.83 47.62
7.5% 79.36 31.74
10% 59.52 23.81
30
2 Effect of DG connections on Finnish distribution
network
2.1 Finnish generic distribution network models
In order to estimate the costs and benefits of DG connections to Finnish distribution
grid, a number of analysis have been conducted for various DG penetration and
concentration levels. Studies were performed on generic one-GSP distribution
network models. These generic models use several typical circuit parameters, e.g.
conductor sizes, lengths, impedances, costs etc. In developing the generic models,
different characteristics of networks for different voltage levels and for different
network types (rural and urban) are considered, in which the parameters of the
networks are obtained from VTT (Technical Research Centre of Finland).
Finnish distribution networks comprise three operating voltage levels: 110kV, 20kV
and 0.4kV. In developing the generic network models, 110kV networks are excluded
from the model for simplicity. Focus of the studies was on the 20 kV and 0.4 kV
networks where a number of technical issues will arise with high DG penetrations. It
is envisaged that less effect of technical issues DG will bring to the 110 kV networks.
Finnish distribution networks are a mix of urban and rural type networks including
both short 20 kV feeders in city areas and long overhead line feeders in surrounding
areas. In deriving the parameters for the generic models, the Southern Finland is
considered as urban area and the rest of Finland as rural. In total, there are 32 GSPs
for rural and 14 GSPs for urban networks respectively.
In the next sections, models for 0.4kV and 20kV networks are described in more
details.
2.1.1 0.4kV network model

There are six typical 0.4kV network models in a rural GSP network and five 0.4 kV
models in an urban GSP network. A single transformer is installed in each
20kV/0.4kV substation. The total number of transformers installed and their capacity
used in our models are listed in Table 2-1.
Table 2-1 Models for 20/0.4kV rural and urban substations

Network Number × capacity of transformers
area Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
200 x 640 x 960 x 640 x 640 x 120 x
Rural 16kVA 30kVA 50kVA 100kVA 160kVA 315kVA
35 x 180 x 110 x 150 x 120 x
Urban 300kVA 500kVA 630kVA 800kVA 1MVA
In total there are 10,040 0.4kV circuits included for the rural model and all of them
are Aerial Cables (AC) lines with an average length of 0.5km for each circuit. For the
urban network model, there are 3135 circuits with an average length of 0.3km for
each circuit, among which 2885 circuits are underground (UG) cables and the rest are
AC lines.
31
In the studies, a number of different conductor types and sizes are available to be used
in the model specifically if 0.4 kV circuits need to be reinforced during the studies.
The size and impedance of various circuits considered in the model are listed below:
Table 2-2 Parameters of 0.4kV circuits for 0.4kV rural and urban network models
Network Cross section
R(Ω/km) X(Ω/km) Type
area (mm2)
16 2.060 0.090 AC
35 0.938 0.104 AC
Rural 50 0.693 0.101 AC
70 0.479 0.097 AC
120 0.273 0.092 AC
70 0.479 0.097 AC
Urban 185 0.182 0.082 UG
240 0.135 0.135 UG
2.1.2 20kV network models

We use one 110kV/20kV substation model for rural networks and two for urban
networks. The number and capacity of transformers installed in the substations are
listed in Table 2-3. Note that there are two parallel transformers in each urban
substation while only a single transformer in each rural 110kV/20kV substation.
Table 2-3 Models for 110/20kV rural and urban substations

Number × capacity of transformers
Network area
Model 1 Model 2
Rural 20 x 20MVA
Urban 6 x 2 x 31.5MVA 6 x 2 x 40MVA
In total there are 100 and 108 20kV circuits for rural and urban network models
respectively. In the generic rural network model the circuit length ranges from 15km
to 70km and in urban network model all the circuits are 5km in length.
In the studies, a number of different conductor sizes are available to be used in the
model specifically if 20 kV circuits need to be reinforced during the studies. The size
and impedance of various circuits considered in the model are summarised in Table
2-4, where OH and UG for circuit type stand for over head and underground
respectively.
32
Table 2-4 Parameters of 20kV circuits for rural and urban networks
Cross section
Network area R(Ω/km) X(Ω/km) Type
(mm2)
34/6 0.847 0.383 OH
54/9 0.535 0.368 OH
Rural 85/14 0.337 0.354 OH
132 0.218 0.344 OH
PAS 70 0.493 0.533 OH
54/9 0.535 0.368 OH
85/14 0.337 0.354 OH
Urban
185 0.169 0.119 UG
240 0.130 0.116 UG
2.1.3 Load profiles

On the generic network models, loads were populated using a number of
characteristic day profiles. There are four types of demand customers considered in
the models with different load profiles. They are residential load without electrical
heating profile, residential load with electrical heating, commercial load and industrial
load. In order to capture hourly temporal variation of loads in different seasons, the
characteristic day load profiles for each demand customer type were derived in terms
of summer, spring/autumn, and winter business and non business days with hourly
time resolution. For rural networks, the load profiles also include a load profile for
agriculture customers.
In these studies, the 0.4kV peak load in one rural GSP network is 95MW and 10MW
for 20kV taking into account the diversity of various load types. The 0.4 kV peak load
are 140MW and 80MW for 20kV in an urban GSP network.
Figure 2-1 and Figure 2-2 show the characteristic day load profiles used in the studies
for rural and urban networks. The profiles are obtained by aggregating the value of
various load types at each hour. With different load distribution among different
customer types, it is expected that the load profiles for rural and urban networks are
different.
33
120
100
winter weekdays
Winter Saturdays
80
Winter Sundays
Load MW
Spring/Autumn weekdays
60
Spring/Autumn Saturdays
40 Spring/Autumn Sundays
Sum mer weekdays

20 Sum mer Saturdays
Sum mer Sundays

0 11
13
15
17
19
21
23
1
Time (hour)
Figure 2-1 Load profiles for a rural GSP network

250
200 winter weekdays
Winter Saturdays
Winter Sundays
150
Load MW
Spring/Autum n weekdays
Spring/Autum n Saturdays
100
Spring/Autum n Sundays
Sum m er weekdays
50
Sum m er Saturdays
Sum m er Sundays
0
11
13
15
17
19
21
23
1
Time (hour)
Figure 2-2 Load profiles for an urban GSP network

2.1.4 DG data
A number of DG penetration levels with various allocations across distribution
networks were developed. A number of forecasted DG installed capacity for Finland
has been provided by VTT. More detailed description can be found in the next
sections.
2.2 Description of case studies

2.2.1 DG penetration levels
There is no specific target value for DG in Finland (Skytte, K. 2005). At present there
are around 800MW DGs primarily connected at 20kV networks and only a small
proportion of them are connected at 0.4 kV.
Case 1 represents a very similar condition with the present situation where the total
installed DG capacity at 20kV and 0.4kV networks is around 800 MW and distributed
across rural and urban almost equally. Considering the growth of DG in the future
will be higher in rural networks than that in urban networks, other three DG
penetration scenarios namely Case 2, 3 and 4 for rural and urban networks
34
respectively were determined. All the four cases are summarised in Table 2-5. The
last row in Table 2-5 illustrates the ratio between DG penetration and the network
peak load considering the peak load for customers connected to 20 kV and 0.4 kV is
around 6.5GW 3.
Table 2-5 Total DG installed capacity for rural and urban networks
Network area DG installed capacity(MW)
Case 1 Case 2 Case 3 Case 4
Rural 445 490 580 670
Urban 422.5 445 490 535
DG/peak load 13.5% 14.5% 16.6% 18.7%
2.2.2 Allocation of DG
In these studies, we assume all the proposed DGs are medium size DGs and they are
connected at 20kV networks.
In order to investigate the impact of different distribution of DG in the networks, four

different allocation scenarios named as L, LM, HM, and H proposed in section 2 were
applied for all levels of DG installed capacity listed in Table 2-5. It can be expected
that when DG is more concentrated into a smaller number of feeders, their impact on
the power flows at those feeders will be more significant. The allocation of DG for
each scenario are summarised in Table 2-6.
It should be noticed that the effect of DG in one GSP network will depend on the
distribution of DG across the network.
Table 2-6 DG allocation scenarios

Number of 20kV
Number of GSPs
DG connected feeders which have
scenarios which have DG out of
over DG out of total 100
total 32 rural GSPs
feeders in one GSP
H 8 30
HM 8 70
Rural
LM 16 30
L 16 70
Number of 20kV
Number of GSPs
DG connected feeders which have
scenarios which have DG out of
over DG out of total 108
total 14 urban GSPs)
feeders in one GSP
H 4 36
HM 4 72
Urban
LM 7 36
L 7 72
3
Source: VTT
35
2.2.3 Application of suitable network models for addressing different issues
The installation of relatively high DG capacity to distribution networks may trigger a
number of technical problems such as voltage rise issues, inadequacy of thermal
capacity and the increase in fault level. In order to alleviate network problems,
network reinforcement becomes necessary. The reinforcement will incur some costs
that need to be minimised.
For voltage rise problem, the studies were conducted only using a rural GSP network
model since the problem mainly occurs in weak rural networks characterised by long
20kV overhead circuits with small diameters. And for investigating network
reinforcement issue due to fault level increase the studies used the urban GSP network
model.
2.2.4 Operation philosophies used in the studies

In order to assess the benefits and costs of implementing passive and active network
management philosophies to facilitate DG connections, these two different
philosophies were applied in the studies.
2.2.5 Modelling of intermittent and non intermittent DG

Assessment of the impact of intermittent (I) and non-intermittent (NI) DG was
proposed for rural network reinforcement studies. Flat output profile was assumed for
non intermittent/intermittent DG running with unity power factor. The energy output
from intermittent case was assumed to be equal to one third of energy output from
non intermittent case.
2.2.6 Benefits and costs of DG connections

On one hand, connection of DG may bring a number of benefits in distribution
networks such as reduction on distribution losses, deferral of distribution network
reinforcement, voltage support, improvement of system security etc. However,
quantifying the tangible benefits is a complex task and requires a number of
simulations. Scope of our studies in this project is to quantify the benefits of DG
connections on the reduction of distribution losses and the deferral of distribution
network reinforcement.
On the other hand, connection of DG may also incur additional costs due to network
capacity reinforcement, new investment in control and communication equipments to
enable active network management and increases in distribution system losses
especially when DG output increases flows etc. The costs can be quantified by
identifying and calculating the cost of upgrading network assets required to facilitate
DG connections while maintaining security and operating constraints in distribution
systems.
The following sections will describe the results for studies conducted on the Finnish
generic network models.
36
2.3 Benefits of active management
In these studies, the costs and benefits of implementing passive and active network
management to facilitate DG connections according to aforementioned scenarios are
quantified. The studies were performed on the urban and rural generic network
models. The benefits of active management were derived from the saving obtained in
the capital investment with reference to the costs when passive networks were applied.
While the cost of active and passive management is quantified by determining the
cost of reinforcing assets which need to be updated to support load or DG connections.
For active management, the cost of control and communication infrastructure is also
added.
2.3.1 Studies on the generic rural network
Network reinforcement for solving voltage rise problems
Results of case studies performed on the generic rural network for quantifying the
benefits of active management in solving voltage rise problems due to DG
connections are described in this section. Figure 2-3 and Figure 2-4 illustrate the
percentage of 20kV feeders that need to be reinforced to curb the voltage rise effect of
DG connections for different DG penetration scenarios with passive (PM) and active
network management (AM) philosophies. In Finland, the range of statutory voltage
change limit is ±5% for 20 kV networks (SFS, 2003). Since DG penetration scenario
of 445MW and 490MW demonstrate the same impact on updated feeder number, the
results in these two scenarios are shown using the same Figure 2-3. And the same
situation is for 580MW and 670MW scenarios shown as Figure 2-4.
The results presented are for the whole Finnish rural networks. Using passive
management, the ratio of circuits that need to be upgraded varies between 0 % and 9%.
While using active management, the ratio varies between 0% and 4.5%. There will be
no circuit reinforcement required if the DG penetration level is relatively low. The
highest requirement for reinforcement occurs when passive management is applied to
facilitate the connection of 580MW and 670MW LM DG scenarios. In these two
cases, the number of violated feeders is the highest ones comparing with other cases.
It is expected that higher DG penetration level triggers more problems and higher
reinforcement costs.
37
7
f eeder s wi t h vol t age

Per cent age of 20 kV
6
r i se pr obl ems
5
occur ( %)
4
0
PM AM
Oper at i on Phi l osophy
L LM HM H
Figure 2-3 The percentage of 20kV feeders upgraded to facilitate connection of
445MW/490MW DG in Finnish rural networks
10
9
f eeder s wi t h vol t age
Per cent age of 20 kV
8
r i se pr obl ems( %)
7
6
5
4
3
2
1
0
PM AM
Oper at i on Phi l osophy
L LM HM H
Figure 2-4 The percentage of 20kV feeders upgraded to facilitate connection of
580MW/670MW DG in Finnish rural networks
In Figure 2-4, the lowest requirement to reinforce 20kV circuits with passive
management occurs at HM scenario. In this case the ratio of 20 kV circuits that need
to be reinforced per GSP is similar as the ratio for the LM case, but because DG in
HM case is located in smaller number (25%) of rural GSPs compared with LM case
(50% of rural GSPs), the total number of circuits that need to be reinforced becomes
less.
The results also demonstrate that active operation regime for example by optimising
tap changer positions and/or by curtailing temporarily generation output will be able
to reduce the requirement to reinforce circuits due to voltage problems. In Figure 2-3
and Figure 2-4 for AM case, there is no circuit reinforcement required for the first
three cases (L, LM and HM). However, if the technical problems raised by DG cannot
be solved economically using active management , for example if the DG needs to be
constrained off too often, a combined active management approach and circuits
reinforcement will be the optimum solution as shown in H scenario. In all cases, it can
be concluded that by using active management, the number of circuits that need to be
reinforced to solve voltage rise problems can be reduced.
38
Capacity reinforcement cost for rural networks
Reinforcement cost depends on the number of circuits that need to be upgraded to

facilitate the DG connections. The cost also depends on the type of circuits required to
replace the existing circuits. The reinforcement process takes into account the
indivisibility of circuits. This approach is in contrast with the approach which
assumes that the size of conductors can be increased continuously; thus the results
become more realistic.
The results of the studies presented in Figure 2-5 to Figure 2-8 show the total Finnish
reinforcement costs for 20kV circuits under both passive and active management and
also for the non-intermittent/intermittent generation case. The costs shown in those
figures correspond to the number of circuits that need to be replaced mentioned in the
previous section.
It is shown in Figure 2-5 and Figure 2-6 that in most of the cases, reinforcement cost
can be avoided by implementing active network management. Even for high DG
concentration (scenario H), significant saving can be achieved if active management
is implemented. Figure 2-5 and Figure 2-6 also demonstrate that intermittent DG will
drive less capacity than non intermittent DG. Thus in both figures, the reinforcement
cost for intermittent DG is always less than the reinforcement cost incurred by non
intermittent DG. It is expected that intermittent generation will drive less investment
since the worst case condition, i.e. when the high output of DG coincides with low
demand conditions, tends to be less frequent.
120
Reinforcement Cost (M€)
100
80
60
40
20
0
445_L 445_LM 445_HM 445_H
DG penetration scenarios
PM AM(Non-Intermittent case) AM(Intermittent case)
Figure 2-5 Reinforcement cost with 445MW DG penetration in rural networks
39
Reinforcement cost for 490MW DG installation
120

100
80
60
40
20
0
490_L 490_LM 490_HM 490_H
Figure 2-6 Reinforcement cost with 490MW DG penetration in Finnish rural

networks
120
100
80
60
40
20
0
580_L 580_LM 580_HM 580_H

networks
120
100
80
60
40
20
0
670_L 670_LM 670_HM 670_H

networks
40
Operation and maintenance costs
In order to calculate the annuitised reinforcement cost, it is assumed that the time
scale to fully recover the capital investment is approximately 20 years with 7% rate of
return. Table 2-7 lists the cost of each rural 20kV circuit reinforcement options 4 .
Table 2-8 summarises the annuatised reinforcement cost and O&M cost.
The O&M cost of previous studies is presented in Figure 2-9 to Figure 2-12. Except
for the O&M cost for scenario with intermittent DG (I), which is indicated specially,
all the values of O&M costs are for case studies associated with non intermittent DG.
The O&M cost for case with intermittent DG only occurs for case studies associated
with scenario H (except for 445MW case) while for other scenarios, the cost is zero
(Table 2-8).
Table 2-7 Unit investment cost (capitalised) and O&M cost of 20kV circuits for rural
networks
Circuit type Investment cost (€/km) O&M cost(€/km/year) O&M cost / investment cost
34/6 6,216 191 3.07%
54/9 8,316 191 2.30%
85/14 9,906 191 1.93%
132 11,375 191 1.68%
PAS 70 13,970 177 1.27%
Table 2-8 Annuatised reinforcement cost and O&M cost for rural networks (M€/year)
DG Cost L LM HM H
capacity type (PM) (AM) (PM) (AM) (PM) (AM) (PM) (AM) (AM/I)
Reinf 0 0 6.28 0 6.57 0 9.91 3.14 0
445MW
O&M 0 0 1.28 0 1.50 0 1.83 0.64 0
Reinf 0 0 6.62 0 7.33 0 9.91 3.14 1.70
490MW
O&M 0 0 1.28 0 1.50 0 1.83 0.64 0.41
Reinf 7.91 0 9.63 3.39 7.72 0 10.47 4.82 2.82
580MW
O&M 1.93 0 2.02 0.83 1.50 0 2.02 1.01 0.64
Reinf 7.91 0 10.23 5.64 7.72 3.96 10.74 5.11 4.65
670MW
O&M 1.93 0 2.02 1.29 1.50 0.96 2.02 1.01 1.01
4
Source : VTT
41
14
Annuatised cost(M€/year)
12
10
L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM)
DG Penetration level(operation philosophy)

Reinforcement cost O&M cost
Figure 2-9 Annuatised reinforcement and O&M cost with 445MW DG installation for
Finnish rural networks
14
12
10
0
L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM) H(AM/I)

Figure 2-10 Annuatised reinforcement and O&M cost with 490MW DG installation
for Finnish rural networks
42
14
Annuatised cost(M€/year) 12
10
0

14
12
10
0

2.3.2 Studies on the generic urban network
Upgrade of switchgear for accommodating the increased fault level
Results of case studies performed on the generic urban network model for quantifying
the benefits of active management in solving fault level problems due to DG
connections are described in this section. Several methods of fault level reduction are
described in (Wu, X., 2003). Splitting network is the common and cheaper option in
practice and was used as the active operation approach for urban network case studies.
Average system fault level at 20kV urban network is about 80MVA and it is assumed
as the switchboard rating in 110kV/20kV substations. The studies assume that all
generator contribution to fault level is five times the rating of the generator.
43
Two different fault level head-rooms were examined:
• 0% headroom: in this case the introduction of DG at 20kV requires the
upgrade of the switchgear in the 110/20 kV substation.
• 10% headroom: in this case the introduction of DG at 20kV requires the
upgrade of the switchgear in the 110/20 kV substation only if its contribution
to fault level is 10% above of the switchgear rating.
Figure 2-13 and Figure 2-14 shows the percentage of switchboards that need to be
updated in the whole Finnish urban networks for these two cases: 0% headroom case
and 10% headroom case with passive and active management.
35
Percent of switchboard need to be
30
25
reinforced(%)
20
15
10 `
0
422.5MW(PM) 422.5MW(AM) 445MW(PM/AM) 490MW(PM/AM) 535MW(PM/AM)
DG installed capacity(management policy) with 10% headroom case
L LM HM H
Figure 2-13 Percent of switchboard need to be replaced with various DG penetrations

in Finnish urban networks in 0% headroom case
35
Percent of switchboard need to be
30
25
reinforced(%)
20
15
10
0
422.5MW(PM/AM) 445MW(PM/AM) 490MW(PM/AM) 535MW(PM/AM)
DG installed capacity(management policy) with 0% headroom case
L LM HM H
Figure 2-14 Percent of switchboard need to be replaced with various DG penetrations

in Finnish urban networks in 10% headroom case
44
Except for the 422.5MW L penetration scenario in 10% headroom case, the number
of overloaded switchboard is reduced by applying AM comparing with PM, the
number doesn’t change with the same density level of different DG capacity in other
cases. This is because in these cases the proposed DG capacity for urban network will
trigger all the switchboards overloaded irrespective of penetration scenarios,
management policies and headrooms. Since the number of overloaded switchboard
and the number GSPs with DG are both the highest among all the scenarios, the
maximum percentage value occurs at L scenario. Same changing trend will occur for
later reinforcement cost figures for the same reason.
Figure 2-15 and Figure 2-16 show the effect of various DG penetration levels on fault
level (FL) increment on urban 20kV networks ( there are two types for Finnish 20kV
network model which is respectively named model 1 and model 2 – see Table 2-3 )
with two headrooms cases and two different management philosophies. The highest
FL increment occurs in 0% headroom case with passive management for each DG
penetration scenario. Also the Figures show clearly that active management can
reduce FL increase dramatically for any DG penetration scenario in both headroom
cases.
160
Fault level increment due to
140
120
100
DG (MVA)
80
60
40
20
0
42 M
44 M
49 M
LM
HM
HM
HM
M
H
L
H
L
53 L
5_
5_
5_
0_
5_
H
L
5_
0_
5_
5_
5_
0_
5_
5_
5_
0_
5_
2.
44
49
53
2.
44
49
53
44
49
2.
42
53
2.
42
42
0% HR (PM) 0% HR (AM) 10% HR (PM) 10% HR (AM)
Figure 2-15 Fault level increment at 20kV networks (model 1) due to DG
45
200
Fault level increment due to DG

180
160
140
120
(MVA)
100
80
60
40
20
0
M
LM
LM
LM
LM
HM
HM
HM
H
L
H
L
L
5_
5_
5_
0_
5_
5_
0_
5_
5_
5_
0_
5_
5_
5_
0_
5_
2.
44
49
53
2.
44
49
53
44
49
53
2.
44
49
53
42
2.
42
42
42
Figure 2-16 Fault level increment at 20kV networks (model 2) due to DG
Reinforcement cost for urban networks
Average cost for switchboards in 110kV/20kV substation is assumed about €380,000.

Figure 2-17 to Figure 2-20 represent the total Finnish reinforcement cost of
switchboard with two different headrooms and two operation philosophies for various
DG installed capacities. From these figures, we can see the reduction of reinforcement
cost is driven by the implementation of AM and the headroom of switchboard rating.
12.0
10.0
8.0
6.0
4.0
2.0
0.0
422.5_L 422.5_LM 422.5_HM 422.5_H
Figure 2-17 Reinforcement cost with 422.5MW DG installation for urban networks
46
12.0

10.0
8.0
6.0
4.0
2.0
0.0
445_L 445_LM 445_HM 445_H
Figure 2-18 Reinforcement cost with 445MW DG installation for urban networks
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
490_L 490_LM 490_HM 490_H
Figure 2-19 Reinforcement cost with 490MW DG installation for Finnish urban
networks
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
535_L 535_LM 535_HM 535_H
Figure 2-20 Reinforcement cost with 535MW DG installation for Finnish urban
networks
O&M cost for switchboard is about €1780/year in urban 110kV/20kV substations.

Table 2-9 and Table 2-10 show annuatised reinforcement cost and O&M cost with 0%
and 10% headroom cases.
47
headroom (M€/year)
MW L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM)
Reinf 0.95 0.25 0.95 0.36 0.95 0.34 0.95 0.41
422.5
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 1.00 0.27 1.00 0.39 1.00 0.37 1.00 0.43

450
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 1.10 0.32 1.10 0.44 1.10 0.42 1.10 0.48

490
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 1.20 0.37 1.20 0.49 1.20 0.47 1.20 0.54

530
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Table 2-10 Annuatised reinforcement and O&M cost in urban network with 10%
headroom (M€/year)
MW L(PM) L(AM) LM(PM) LM(AM) HM(PM) HM(AM) H(PM) H(AM)
Reinf 0.75 0.05 0.85 0.26 0.83 0.23 0.89 0.35
422.5
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 0.80 0.07 0.90 0.29 0.88 0.25 0.94 0.38

450
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 0.90 0.12 1.00 0.33 0.98 0.30 1.04 0.43

490
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
Reinf 1.00 0.17 1.10 0.39 1.09 0.36 1.14 0.48

530
O&M 0.10 0.10 0.05 0.05 0.06 0.06 0.03 0.03
2.3.3 Additional cost associated with active management
Curtailment of DG output
On active network, in addition to optimising network voltage control devices such as

tap changers and reactive compensators the output of DG can be curtailed in order to
reduce the voltage rise effect. This effect particularly occurs when demand is low and
DG output is high. However, curtailing DG output incurs some costs which include
the cost of losing the opportunity to sell energy among other things.
Table 2-11 shows the results of the studies with reference to the energy curtailed for
various DG penetration levels and for non-intermittent (NI) and intermittent (I) cases.
Table 2-11 Energy curtailed (GWh/year) for whole rural network

Penetration L LM HM H
level
NI I NI I NI I NI I
445 MW 0.00 0.00 0.00 0.00 0.00 0.00 0.48 33.93
490 MW 0.00 0.00 9.59 0.96 0.00 0.00 21.46 30.25
580 MW 0.00 0.00 0.60 13.57 17.20 1.72 25.40 40.37
670 MW 0.00 0.00 0.00 29.35 0.18 14.62 0.34 34.56
Average energy price at 20kV Finnish rural network is assumed to be €47.7/MWh

(Source: VTT). Therefore, the energy revenue losses for generator operators can be
48
derived as shown in Figure 2-21 and Figure 2-22 respectively for non intermittent and
intermittent cases.
In most of these cases, higher energy curtailed is required for studies with intermittent
DG compared with the energy curtailed for studies with non-intermittent DG. The
reason is that in non-intermittent case, considering energy curtailments limit (0.5% of
total output), it is more economic to reinforce and replace a number of circuits with
larger conductor sizes rather than curtailing energy to mitigates the voltage rise
problems. However, this indicates that the less energy curtailment obtained is at the
expense of higher assets investment cost.
1.4
because of curtailment (M€)
1.2
Energy revenue loss
0.8
0.6
0.4
0.2
0
445 490 580 670
DG installed capacity(MW)
L LM HM H
Figure 2-21 Energy revenue loss due to curtailment in non-intermittent case

2.2
Energy revenue loss because
2
1.8
of curtailment (M€)
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
445 490 580 670
L LM HM H
Figure 2-22 Energy revenue loss due to curtailment in intermittent case
AM implementation cost
Using the assumption as the UK case studies, the cost for implementing active
management is supposed to be €14,582.4 per DG scheme for Finnish rural networks
and €145,824 per substation for urban networks. Table 2-12 and Table 2-13 represent
49
the capitalised cost of implementing active management in the Finnish rural and urban
networks.
Table 2-12 Total capital cost (M€) for AM implementation at Finnish 20kV rural
networks
DG penetration level
DG scenario
445 MW 490 MW 580 MW 670 MW
L 0.00 0.00 0.00 16.33

LM 7.00 7.00 7.00 7.00
HM 8.17 8.17 8.17 8.17
H 3.50 3.50 3.50 3.50
Table 2-13 Total capital cost for AM implementation at Finnish 20kV urban networks
DG Total cost for AM
scenario implementation(M€)
L 8.17
LM 4.08
HM 4.67
H 2.33
The cost of implementing AM in urban networks in these studies is only influenced

by the DG density in the one GSP network model. It is important to note that the cost
of implementing AM to address the increased fault level due to DG connections may
overwhelm its benefits. This is because AM may not significantly reduce the need of
reinforcing networks due to the increase of fault level.
2.3.4 Costs and benefits of active management on Finnish networks
Considering the costs associated with active management, we combine them with
assets upgrade costs that have been analysed previously to get the total investment
cost. The costs obtained from studies with active management are then compared with
the reinforcement cost required by a passive network in order to quantify the benefits
of active management. Figure 2-23 shows the total investment cost of Finnish rural
networks in various penetration scenarios with active and passive management and
with non-intermittent and intermittent case.
The total investment costs in 445MW, 490MW and 580MW L penetration scenarios
are zero and not included in Figure 2-23. This figure can indicate clearly the value of
AM in Finnish rural networks. 38% to 90% investment cost can be saved if the
operation philosophy is changed from passive to active. The results (Figure 2-23) also
demonstrate that intermittent DG will drive less investment.
50
140
120
Total cost(M€)
100
80
60
40
20
0
44 M
HM
49 M
HM
58 M
HM
67 M
HM
49 H
58 H
H
67 L
L
L
L
5_
0_
0_
0_
0_
0_
5_
5_
0_
0_
0_
0_
0_
44
49
58
67
67
44
PM AM ( NI ) AM ( I )
Figure 2-23 Total investment cost with PM and AM philosophy in Finnish rural
networks
For the case studies on the generic urban network models for 422.5MW and 445MW
L DG scenarios and for two different headrooms cases, the total investment costs with
AM exceed those under PM philosophy because the reduction in the reinforcement
cost is less than the implementation cost of the active management. For other
scenarios, implementation of active management has clear benefits with reference to
the reduction of total investment cost. This situation is shown in Figure 2-24.
14
Total investment costs (M€)
12
10
0
H
H
42 _LM
H
H
42 M
HM
M
44 L
49 L
53 L
42 5 _L
44 M
49 M
53 M
5_
0_
5_
5_
0_
5_
5_
H
H
L
5_
0_
5_
5_
0_
5_
5_
2.
44
49
53
2.
44
49
53
5
2.
42
2.
0% HR ( PM) 0% HR ( AM) 10% HR ( PM) 10% HR ( AM)
Figure 2-24 Total investment costs in the studies on the generic urban network with
PM and AM and two different headroom cases
In order to perform comparisons that are consistent with UK situation, it is assumed

that the whole switchboard will need to be replaced no matter how much the fault
level increases above its rating. The reinforcement costs with passive management
(PM) and active management (AM) are then changed as shown in Table 2-14. In all
the cases except for the 422.5MW L density scenario with 10% headroom (HR), DG
connection will trigger fault level increases above switchboard rating in Finnish urban
51
networks. The reinforcement cost strongly depends on the number of models and
GSPs which have DG. Due to the AM implementation costs, except in the special
case mentioned above where AM leads to reduced reinforcement costs, all other cases
indicate that for Finish urban networks modified using the assumption described
above, AM will result in more reinforcement costs than PM.
Table 2-14 Switchboard reinforcement cost (M€)

422.5MW 445MW 490MW 535MW
Scenarios
PM AM PM AM PM AM PM AM
21.28
L 21.28 (18.81 with 21.28 29.45 21.28 29.45 21.28 29.45
10% HR)
LM 10.64 14.72 10.64 14.72 10.64 14.72 10.64 14.72
HM 12.16 16.83 12.16 16.83 12.16 16.83 12.16 16.83
H 6.08 8.41 6.08 8.41 6.08 8.41 6.08 8.41
2.4 Effect of DG on distribution network losses

In this section, the results of case studies on evaluating the impact of DG connections
on the generic Finnish distribution networks losses are described. Only 20 kV
networks and 0.4 kV network losses will be included in the analyses. The studies are
used to demonstrate the impact of intermittent and non intermittent DG and also the
impact of different DG penetration levels and density levels on the 20 kV and 0.4 kV
distribution system losses. Since the DGs are connected at 20 kV network, the
changes in losses are particularly due to the changes in 20 kV network losses.
Figure 2-25 to Figure 2-28 show the impact of DG connections for various scenarios
on distribution network losses. The results are obtained for the case studies with non
intermittent DG. For scenario L with 445MW installed capacity, DG contributes to
the less energy flows from transmission and hence reduces distribution losses.
However, for a large penetration of DG, the losses increase due to the increase in
reverse power flows.
These figures as well as the later figures in intermittent case also show that losses in
the active network tend to be larger than those in the passive network since circuits in
the active network tend to be smaller in size, which consequently leads into higher
losses.
52
3.9
3.8
3.7
3.6
Losses(%) 3.5
3.4
3.3
3.2
3.1
0 445 490 580 670
DG Installed Capacity(MW)
PM AM
Figure 2-25 Losses in the rural distribution networks for scenario L (non-intermittent
DG)
p
6.0
5.0
4.0
Losses(%)
3.0
2.0
1.0
0.0
0 445 490 580 670
DG Installed Capacity (MW)
PM AM
Figure 2-26 Losses in the rural distribution networks for scenario LM (non-
intermittent DG)
5.0
4.5
4.0
3.5
Losses(%)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
0 445 490 580 670
PM AM
Figure 2-27 Losses in the rural distribution networks for scenario HM (non-
intermittent DG)
53
p
7.0
6.0
5.0
Losses(%)
4.0
3.0
2.0
1.0
0.0
0 445 490 580 670
PM AM
Figure 2-28 Losses in the rural distribution networks for scenario H (non-intermittent
DG)
Considering intermittent case will abate the effect of DG with higher penetration level
on losses increase, it is assumed that losses in intermittent case are 0.9 of losses in
non-intermittent case for ‘H’ and ‘LM’ penetration scenarios. Conversely, it will
decrease the contribution of DG with lower penetration level on the reduction of
losses. We use experimental data 1.1 to multiply losses in non-intermittent case for
‘HM’ and ‘L’ penetration scenarios to get losses value in intermittent case. These
factors adjust the losses percentage and hence form the changing tendency with
various DG installed capacities in intermittent case shown as Figure 2-29 to Figure
2-32.
4.1
4.0
3.9
3.8
Losses(%)
3.7
3.6
3.5
3.4
3.3
3.2
3.1
0 445 490 580 670
PM AM
Figure 2-29 Losses in rural distribution network for scenario L (intermittent DG)
54
5.0
4.5
4.0
3.5
Losses(%)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
0 445 490 580 670
PM AM
Figure 2-30 Losses in rural distribution network for scenario LM (intermittent DG)
6.0
5.0
4.0
Losses(%)
3.0
2.0
1.0
0.0
0 445 490 580 670
PM AM
Figure 2-31 Losses in rural distribution network for scenario HM (intermittent DG)
6.0
5.0
4.0
Losses(%)
3.0
2.0
1.0
0.0
0 445 490 580 670
PM AM
Figure 2-32 Losses in rural distribution network for scenario H (intermittent DG)
Figure 2-33 and Figure 2-34 summarise the Finnish rural network losses due to the
penetration of non-intermittent / intermittent DGs for various scenarios applied in the
networks with active and passive operation philosophies.
55
5.5
5.0
4.5
4.0
Losses(% ) 3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
0 445(NI) 445(I) 490(NI) 490(I) 580(NI) 580(I) 670(NI) 670(I)
DG Installed CapacityMW(Output Cases)
Without DG L LM HM H
Figure 2-33 Losses in the rural passive distribution networks for non-
intermittent/intermittent cases with various DG penetration scenarios
7.0
6.0
5.0
Losses (%)
4.0
3.0
2.0
1.0
0.0
0 445(NI) 445(I) 490(NI) 490(I) 580(NI) 580(I) 670(NI) 670(I)
DG Installed CapacityMW(Output Cases)
Figure 2-34 Losses in the rural active distribution networks for non-
intermittent/intermittent cases with various DG penetration scenarios
Figure 2-35 and Figure 2-36 shows the losses in the generic Finnish urban networks in
non-intermittent and intermittent case respectively. The results for intermittent case
were obtained using the adjusting factor mentioned in rural network case studies.
Since splitting networks is realised by opening the circuit breakers located between
two lower voltage busbars of transformers, the impedance of system between primary
and secondary voltage level will be doubled (Wu, X., 2003). For scenario L, the
losses decrease but start to increase with more DG installed and higher allocation
density.
56
4.5
3.5
3
Loses (%)
2.5
1.5
0.5
0
0 422.5 445 490 535
Figure 2-35 Urban network losses with various DG penetration scenarios (Non-
Intermittent case)
4.5
4
3.5
3
Losses(%)
2.5
2
1.5
1
0.5
0
0 422.5 445 490 535
Figure 2-36 Urban network losses with various DG penetration scenarios (Intermittent
case)
2.5 Effect of DG on distribution network Capex

Another benefit of DG is to replace the system’s distribution and transmission
network capacity because they are located close to demand and energy can be
consumed directly in local area. Therefore power flow, which is transporting from
transmission system decreases. But this is the case only for certain amount of DG
installed to network. With higher DG penetration, power flows may start to reverse
and the network capacity may start to be driven by DG rather than by demand
customers. Since we ignore 110kV voltage level in Finnish distribution network
model, only the maximum power flows in 110kV/20kV substations were investigated.
57
Figure 2-37 illustrates the computed maximum power flows measured at the
110kV/20kV substation for various DG penetration scenarios on the generic Finnish
active and passive rural network. Maximum power flows in H density level for all
DG capacity scenarios are larger than the flow in the case without DG. In other cases
the benefit from DG on network capacity replacement can be realised.
14. 00
Maximum power flow (MVA)
12. 00
Wi t hout DG
10. 00 445MW( PM)
490MW( PM)
8. 00 580MW( PM)
670MW( PM)
6. 00
445WM( AM)
4. 00 490WM( AM)
580WM( AM)
2. 00 670WM( AM)
0. 00
L LM HM H
Penetration Scenario
Figure 2-37 Maximum power flow in one 110kV/20kV substation which has DG with
various DG penetration scenarios for AM and PM philosophy in rural model
Also from the curve we can see maximum power flow for each scenario with active
management is smaller than that with passive management but not in a large amount
in magnitude because of energy curtailment limits for active management.
With above maximum power flow value and unit cost for assets, potential benefit of
DG (M€) on replacing distribution network assets (110kV/20kV transformer) are
assessed in Table 2-15.
Positive values mean the Capex will decrease in the corresponding cases. Negative
values in H scenario indicate opposite effect of DG on Capex reduction. For L
scenario, the value of DG on assets replacement tends to increase with DG capacity
increase. For LM and HM cases, it decreases because the excess of maximum flow in
these scenarios over this value of non-DG case in substation becomes bigger in
magnitude with DG capacity increase.
Table 2-15 Potential benefit of DG on replacing passive (PM) or active (AM)

distribution rural network assets (M€)
Scenarios 445 MW 490 MW 580 MW 670 MW
L 6.35 6.95 8.13 9.24
PM LM 3.41 2.79 1.51 0.25
HM 5.01 4.38 3.13 1.86
H -1.45 -2.05 -3.34 -4.64
L 6.35 6.95 8.12 9.22
AM LM 3.48 2.98 1.67 0.40
HM 5.04 4.44 3.39 2.02
H -1.25 -1.72 -2.98 -4.31
58
Figure 2-38 and Figure 2-39 show maximum flow at different substations (model 1
and model 2) in the generic urban network respectively. Table 2-16 represents the
potential benefit of DG on replacing urban network assets.
Maximum power flow (MVA) 25
20
15 Wi t hout DG
422. 5MW
445MW
10
490MW
535MW
5
0
L LM HM H
Figure 2-38 Maximum power flow in one 110kV/20kV substation (model 1) which
has DG for urban network
35
Maximum power flow (MVA)
30
25
Wi t hout DG
20 422. 5 MW
450MW
15 490MW
535MW
10
0
L LM HM H
Figure 2-39 Maximum power flow in one 110kV/20kV substation (model 2) which
has DG for urban network
Table 2-16 Potential benefit of DG on replacement of urban network assets (M€)

Scenarios 422.5MW 445 MW 490 MW 535 MW
L 4.16 4.37 4.76 5.13
LM 3.52 3.30 2.86 2.39
HM 3.78 3.91 3.97 3.50
H 0.16 -0.07 -0.54 -1.00
The potential benefit of DG on network assets replacement in urban area varies from
0.16M€ to 5.13M€ according to various DG penetration levels except H density level
with 445MW to 535MW capacity scenarios, in which DG causes more network
capacity requirement than non-DG case,.
59
2.6 Effect of micro or mini generation on Finnish distribution
network losses reduction and network capacity replacement
In Finland, several micro or mini generation technologies i.e. small hydro power 5,
diesel generation, biogas and fuel cells, etc exist. These generators are connected at
0.4 kV networks. In order to quantify the effect of small generation connected at the
generic Finnish 0.4kV networks; the studies use the output profile of small hydro
power generation since it is widely used in rural areas due to the availability of hydro
energy from small rivers. The profile is shown in Figure 2-40.
The studies focus on the effect of small hydro plant in rural networks. Currently, the
total small hydro power plants in Finland is about 40MW and the growth rate is about
9%/year. The forecasted generation capacity cases used in these studies are shown in
Table 2-17. The studies assume that all of these generators are allocated at 50% GSPs
for low density (L) scenario and 25% GSPs for high density (H) scenario. The number
of GSPs which have DG for both scenarios is presented in Table 2-18.
1.2
Winter Weekdays
0.8
Winter Saturday/Sunday
Spring Weekdays
P.U.
0.6 Spring Saturday/Sunday
Summer Weekdays
0.4 Summer Saturday/Sunday
Autum Weekdays
0.2 Autum Saturday/Sunday
0
1 5 9 13 17 21
Time(Hr)
Figure 2-40 Small hydro power generator normalised output profile
Table 2-17 Small hydro power generator installed capacity cases

60 86.25 172.5 210
Table 2-18 Penetration scenarios

Number of GSPs with small generation
Scenario
( Total 32)
L 16
H 8
5
In this context for Finnish case studies, the capacity of small hydro power is less than 1MW
60
Table 2-19 Losses and maximum flow when small hydro power generation connected
at Finnish rural lower voltage network
Small hydro power Losses in the rural Maximum flow
Losses in the whole
generation penetration networks with DG entering
rural networks (%)
scenarios (%) GSP(MVA)
without DG 3.42 3.42 111.56
60MW_L 3.29 3.35 109.62
60MW_H 3.16 3.36 107.68
86.25MW_L 3.23 3.33 108.77
86.25MW_H 3.05 3.33 105.99
172.5MW_L 3.05 3.24 105.99
172.5MW_H 2.73 3.25 100.46
210MW_L 2.97 3.20 104.78
210MW_H 2.60 3.22 98.07
Table 2-19 summarises the effect of small hydro power generation on Finnish rural
distribution network losses and network capacity replacement. Small hydro power
generation connected to Finnish lower voltage rural network decrease the network
losses and maximum flow entering GSPs so that bring benefit on network investment
deferral or reduction. These effects become clearer with DG penetration levels
increase and the minimum losses percent is 2.6% occurring with 210MW H
penetration scenario. From Table 2-19 we can see that small hydro generators
contribute not only to reduce the maximum flow entering GSP but also to reduce the
losses over the distribution network. This is due to the fact that the peak hydro power
generation output coincides with peak demand. Comparing with the UK cases, hydro
power generation technology has the similar effect on network with that from micro-
CHP.
2.7 Summary of the effect of DG connections on Finnish

distribution networks
Figure 2-41 and Figure 2-42 represent the incremental investment cost for rural and
urban networks considering the assets reinforcement cost as well as all the cost
associated with active management for various scenarios.
For rural networks, the incremental cost with passive management is from around 122
€/kW to 236 €/kW. For active management, it is from 11.4 €/kW to 81 €/kW for
intermittent case and from 14.8 €/kW to around 99.6 €/kW for non-intermittent case.
The values are zero for scenario L in all cases except in the case where DG installed
capacity is 670MW.
61
250
Incremental cost (€/kW)

200
150
100
50
LM
LM
LM
LM
H
H
HM
HM
HM
HM
L
0_
0_
5_
0_
0_
0_
0_
5_
0_
0_
0_
5_
0_
67
67
44
49
58
58
67
44
49
58
67
44
49
PM AM(NI) AM(I)
Figure 2-41 Incremental investment cost in active and passive Finnish generic rural
networks for various DG penetration scenarios (€/kW)
Figure 2-42 shows the incremental investment cost for various DG penetration
scenarios with different headrooms and management philosophies for urban network.
The incremental cost ranges from 13.8 €/kW to 25.5 €/kW.
Incremental investment cost (€/kW)
30
25
20
15
10
0
42 _LM
H
H
M
M
49 L
42 M
53 L
44 L
42 5 _L
49 M
53 M
44 M
0_
5_
5_
5_
0_
5_
5_
H
H
H
L
L
0_
5_
5_
0_
5_
5_
5_
2.
49
53
44
2.
44
49
53
5
2.
42
2.
Figure 2-42 Incremental investment cost with various DG penetration scenarios and
management philosophies for Finnish urban networks (€/kW)
From Table 2-15 and Table 2-16, we could derive the incremental DG benefit on
replacing distribution network assets with passive management and active
management for rural and urban networks shown as Table 2-20 and Table 2-21.
These DGs are connected at 20kV networks. From these two tables we can see the
benefit of DG on network capacity replacement is higher with lower DG penetration
levels. Large amount of DG installation will cause opposite effect on network
capacity reduction, which is reflected from the negative values.
62
Table 2-20 Incremental benefit of DG on replacement of Rural network assets (€/kW)
L 14.27 14.19 14.02 13.79
PM LM 7.67 5.68 2.61 0.37
HM 11.26 8.94 5.40 2.77
H -3.26 -4.19 -5.76 -6.92
L 14.27 14.19 14.00 13.76
AM LM 7.81 6.09 2.87 0.60
HM 11.34 9.07 5.84 3.01
H -2.80 -3.50 -5.14 -6.43
Table 2-21 Incremental benefit of DG on replacement of Urban network assets (€/kW)

Density DG installed capacity (MW)
level 422.5 490 580 670
L 9.85 8.91 8.20 7.66
LM 8.34 6.74 4.94 3.57
HM 8.95 7.98 6.84 5.23
H 0.38 -0.14 -0.92 -1.49
Table 2-22 shows the incremental benefit from small hydro power generation on rural
network assets replacement. The value is around 15 €/kW for low density level and 31
€/kW for high density level irrespective of generation capacity.
Table 2-22 Incremental benefit of small hydro power generation on of Rural network
assets replacement (€/kW)
Generation Density level
capacity L H
60MW 15.39 30.75
86.25MW 15.38 30.71
172.5MW 15.35 30.59
210MW 15.35 30.54
63
3 Summary
This report describes the cost and benefit of DG on the UK and Finish distribution
networks. On one hand, the cost of DG connections is obtained by calculating the cost
of network reinforcement needed to mitigate the technical problems, such as voltage
rise problems in rural networks and the increase in fault level (short circuit capacity)
in urban networks that are caused by its connection. On the other hand, the benefit of
DG is determined by computing the reduction in distribution losses and the ability of
DG to release network capacity which can be used to accommodate future loads.
The studies were carried out using the developed generic networks. Different network
characteristics in rural and urban areas and different network control schemes i.e.
active and passive control have been modelled and used in these studies to evaluate
the impact of different DG penetration levels within the different distribution
networks. The impact of different micro generation technologies such as PV, CHP
and small hydro on distribution networks was also studied.
3.1 Key drivers
The drivers which affect the cost and benefit of DG on the system are summarised as
below.
1. DG penetration and density level

Greater installed capacity of DG and denser DG penetration will result in more
feeders with voltage rise problems in rural networks and will require that more
protection assets are updated in urban networks. Hence the reinforcement cost will
increase as the DG penetration level increases.
DG will contribute in the reduction of system losses when DG reduces power
flows across distribution networks. This is likely to happen when the penetration
level is relatively low and DG is distributed judiciously in distribution networks.
However, the studies have demonstrated increase in losses with high penetration
of DG and high density of DG allocation.
2. Network management philosophy (active vs. passive networks)

Under the traditional ‘Fit and forget’ approach, i.e. passive network operation
philosophy, a large amount of investment is needed to upgrade current network
assets. The benefit of active management for reducing these upgrade costs is clear
for UK networks and Finnish rural networks. When it is assumed, however, that
the entire switchboard must be replaced if required, then in most cases,
reinforcement costs for Finish urban networks when using AM are larger than the
reinforcement costs with PM. Evaluation of the benefits of AM should consider
the AM implementation cost, which covers additional control and communication
devices on the networks. Although losses in AM are higher than those in PM due
to the continued use of smaller sized assets, the cost of losses is much small in
comparison with investment costs. However, the application of active network
should not be justified only with the reduction of cost in distribution network but
also with its benefits for transmission and the overall system. In the highly
64
distributed power system, controllability of DG facilitated by active network to
support transmission and distribution system operation is essential.
3. DG technologies and the correlation between DG output and peak load

The effect from non-intermittent and intermittent generation on the distribution
network capacity and losses depends on the variability of imbalance between load
and generation occurring. Some renewable technology depends on the location of
energy source and seasons. CHP has more flexibility in where is can be located
than Hydro power generation, so it can have an impact on both rural and urban
network. Hydro power is only for rural network. The Micro CHP applied in the
UK case and small hydro power applied in the Finnish case both have similar
effects on network loss reduction and network capacity replacement because of
the coincidence of DG maximum output with peak load. PV has weaker effect in
UK since the maximum output of PV occurs in summer while maximum load is in
winter.
3.2 Conclusions from studies on the UK and Finnish generic

network models
The results of case studies carried out on the generic UK and Finnish networks can be
summarised as follows, in which the results in the unit of sterling pounds for the UK
studies are converted into Euro using exchange rate: 1 GBP = 1.5 EUR
• Investment cost of distribution networks due to DG integration.
Rural networks
All the proposed DG is assumed to be connected at medium voltage level circuits.

The incremental cost of rural network asset reinforcement is zero for low DG
penetration levels in both the UK and Finnish networks. That means the current
networks have the ability to accommodation small amount of DG without any
reinforcement due to voltage rise problems. Once investment is required, for UK
networks with passive management the incremental cost changes from 20€/kW to
83.7€/kW with various DG penetration levels. In networks applying active
management with medium and high DG installation, incremental cost changes from
16€/kW to around 64.9€/kW for both intermittent and non-intermittent cases with
considering costs associated with active networks operation. The incremental
investment costs in medium and high DG penetration scenarios with passive
management for Finnish rural networks range from 122€/kW to 236€/kW. With
active management, the incremental investment cost drops to 11.4€/kW-81€/kW for
intermittent case and 14.8€/kW-99.6/kW for non-intermittent case. The comparison of
non-zero incremental cost between UK and Finnish rural networks is listed in
65
Table 3-1.
66
Table 3-1 Incremental cost comparison between UK and Finnish rural networks
when network assets replacement required (€/kW)
UK rural networks Finnish rural networks
Network
Passive Active Passive Active
Management
Management Management Management Management
Philosophy
€/kW 20-83.7 16-64.9 122-236 11.4-99.6
Theses results show that cost of DG penetration strongly depends on the

characteristics of the networks. Additionally, the benefit of active management to
investment cost saving is higher in Finnish rural networks than the corresponding
benefits in the UK.
The values in Finnish cases are much larger than those in UK case. This is caused
mainly due to following reasons.
1. Firstly, the average length of overhead lines which experience problems is around
20km in UK rural networks while this value for Finland is from 30km to 70km
which are 1.5 to 3.5 times of UK cases. With the same order of magnitude of unit
reinforcement cost per kilometre, circuit replacement will result in more
investment costs with longer lines.
2. Secondly, most of the loads in the Finnish network model are located close to the
substation and only a small amount of loads can be used to absorb DG connected
at the end of the feeder. In this case, DG connection will trigger voltage rise
problems and hence require circuit reinforcement in any scenario. Also, the
voltage rise problem is more severe and reinforcement costs are higher compared
with the UK cases since in the UK rural network model, the loads are mainly
distributed increasingly or uniformly along the feeder.
3. The third reason is due to assumptions in the circuit reinforcement options. For
UK case, we assumed the size of circuit can increase linearly. So we increased the
problem circuit size linearly until the voltage problems are resolved so that
minimum cost option can be obtained for circuit reinforcement. But for Finnish
case, indivisibility of circuit sizes was assumed. This means very big circuits
might be needed, with high reinforcement cost, if the second biggest size circuit
can not solve voltage rise problem.
Urban networks
For urban networks, without any headroom left for accommodating the increase in
fault level, DG connections will immediately cause switchboard reinforcement in
passive networks. Under these conditions, the incremental cost in UK urban networks
varies from 58.9€/kW to 471.5€/kW. With 10% headroom available in the switchgear
rating, the incremental cost is in the range of 0 to 243€/kW for the UK. For Finnish
urban networks the incremental cost is from 11.4€/kW to 50.4€/kW for both
headrooms. With Active management, urban networks incremental reinforcement cost
in the UK can be reduced into the range of 23.8€/kW to 189.6€/kW. An exception to
this is the ‘L’ density 422.5MW with 10% headroom case. Other cases show for the
Finnish network that the cost is bigger with AM than the corresponding value with
67
PM with the value for AM varying from 15.7 €/kW– 69.7€/kW. Table 3-2 gives the
range on these values.
Table 3-2 Incremental cost comparison between UK and Finnish urban networks
(€/kW)
UK urban networks Finnish urban networks
Management Passive Active Passive Active
Philosophy Management Management Management Management
Head rooms 0% 10% 0% 10% 0% 10% 0% 10%
58.9 - 0- 23.8 - 23.8 - 11.4- 11.4- 15.7- 15.7-
€/kW
471.5 243 189.6 189.6 50.4 50.4 69.7 69.7
From above results, we can see the same unit DG penetration can lead to much more
network reinforcement costs in UK urban networks than in Finnish urban networks.
This is caused by the network model characteristics as well as the reinforcement cost
of switchboard in either network.
The UK generic distribution network model covers 3 voltage levels of 11kV, 33kV
and 132kV when considering DG effect on network fault level. Therefore the
reinforcement cost on switchboard includes more than one voltage level in large
amount of DG penetration case, for example 7.5GW and 10GW of DG in the HM and
H scenarios in which the maximum incremental costs occur. Also the cost of
switchboards is very high in higher voltage level substations. This can be seen in
Table 1-8 for the UK situation. In Finnish case only fault level rise at 20kV voltage
level networks is considered and the whole switchboard cost is 380,000€. Apparently
more complex networks and more expensive assets contribute to more reinforcement
costs. Generally it can be concluded that active management application can reduce
reinforcement cost if there is still headroom left.
• Benefits of DG on network losses and capacity reduction.
The range of effects of DG connected at medium voltage level on UK and Finland

networks are shown in
Table 3-3 which focuses on the differences between the value of losses before and
after DG connection. Here we introduce the same adjust factors for intermittent case,
which is described in section 3.4 for Finnish networks, to UK case studies. The
negative value in bracket means losses increase.
Table 3-3 Effect range of DG on UK and Finnish distribution networks losses

reduction (average value)
UK Finland
Network
Passive Active Passive Active
Management
Management Management Management Management
Philosophy
Non-intermittent
NI I NI I NI I NI I
/Intermittent
Losses (%) (-4.4) (-3.6) (-6.2) (-5.3) (-1.0) (-0.88) (-1.55) (-1.3)
Reduction -0.62 -0.6 -0.62 -0.6 -0.04 -0.002 -0.04 -0.002
The Incremental benefit of DG on network capacity replacement costs for the UK

case remains around 112.5€/kW except when the value drops to 45.1€/kW in 10GW
68
with ‘H’ density level scenario in which large reversed power flow occurs. This value
for Finnish rural networks varies from 0.37€/kW to 14.27€/kW and from 0.38€/kW to
9.85€/kW for urban networks apart from the H density level for which almost all the
DG capacity scenarios with negative values occur. In other words, too high DG
penetration will not bring benefit of network reinforcement deferral. The incremental
benefit on UK network capacity replacement is much bigger than Finnish case. This is
because DG connection can bring more contribution to capacity replacement for UK
networks because it covers from 11kV to 132kV voltage level networks including
more expensive substations. For Finnish case, only 110kV/20kV substations capacity
is considered to be replaced.
Comparing the values of incremental network investment costs with incremental

potential benefits of DG on network capacity replacement, we can see the investment
saving due to the network reinforcement deferral can not offset the network upgrading
cost for each scenario. Generally higher benefits occur in relatively low DG
penetration levels with lower density scenarios.
• Benefits of micro or mini generation on network losses and capacity reduction.
Because micro (or mini) generation is connected directly at low voltage networks
where the most distribution network customers are connected, these generations could
contribute effectively in the reduction of network losses. In the UK, on average the
losses can be reduced by 0.4 %-0.8% depending on the production profiles of the
micro generation. While the benefit of small hydro power generation in Finnish rural
networks in term of losses is around 0.2%.
The benefit of micro or mini generation on network investment deferral strongly

depends on the production profiles of micro generation and load profiles of demand
customers. The benefit from PV is zero in the UK. And Micro-CHP incremental
benefit is from 35.4£/kW to 124£/kW for UK case. The incremental benefit from
small hydro power generation is about 15.36€/kW for L density level and 30.6€/kW
for H density level situations. In both cases, micro generation brings positive value to
the UK and Finnish network capacity replacement
3.3 Generic conclusions

The sources of system costs of integrating DG and the system benefits that DG can
bring have been discussed. The costs and benefits of DG are likely to be system
specific. The values are driven by a set of parameters namely DG penetration level,
distribution of DG across the system, DG technologies, unit sizes, correlation between
DG output and load, network characteristics (rural/urban/semi urban), system
headroom, network reinforcement cost, network structures etc. Thus, it is not the aim
of this report to generalise the value of DG obtained from the studies on the UK and
Finnish networks. Instead, this report aims to provide a framework and methodology
to assess the cost and benefits of DG that can be used to evaluate the impact of DG on
other EU countries. This report also highlights the key drivers which will affect the
costs and benefits of DG to system development and operation.
69
References
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Monetarisation of Cost and Benefits of DG Options”, Report for DG-Grid, Jan
2006, http://www.dg-grid.org/results/index.html.
z Green, P., Smith, S. and Strbac, G. (1999) “Evaluation of alternative distribution
network design policy”, IEE Electric Power Distribution System Engineering, Vol.
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“Embedded Generation”, Institution of Electrical Engineers, London.
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(2003) “A Monte Carlo approach for assessment of investments deferral in radial
distribution networks with distributed generation”, IEEE Power Tech
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with public low-voltage distribution networks”, Energy networks association.
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70

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Costs and Benefits of DG Connections to

Grid System – Studies on the UK and

D.M. Cao, D. Pudjianto, G. Strbac,

Research Project supported by the European Commission,

Report no. Dec 2006

The DG-GRID research project is supported by the European Commission,

For further information:

1. Section 2: UK distribution network model based on UK network

2. Section 3: Finnish distribution network model based on Finnish network

3. Section 4: Conclusion is given deriving from the results of UK and Finnish

Scenario L can be explained as follows. For 2.5 GW DG penetration, DG will be

1.2 Network description

The GSP substation is composed of 2×240MVA transformers. Eight 132kV overhead

Table 1-2 Circuit parameters for UK 0.4kV network model

Table 1-4 Circuit parameters for UK 33kV network model

Table 1-5 Circuit parameters for UK 132kV network model

Figure 1-1 Annual load profiles

1.3 Percentage of lines and substations to be upgraded in rural

Figure 1-2 Percentage of lines and substations to be upgraded in the UK for a DG

Figure 1-3 Percentage of lines and substations to be upgraded in the UK for a DG

Percentage of scheme to be replaced (%)

Figure 1-4 Percentage of lines and substations to be upgraded in the UK for a DG

1.4 Upgrade cost in rural networks

11kV lines 33/11kV transformers 33kV lines

Figure 1-5 Upgrade costs for a DG penetration of 5GW

11kV lines 33/11kV transformers 33kV lines

Figure 1-6 Upgrade costs for a DG penetration of 7.5GW

Figure 1-7 Upgrade costs for a DG penetration of 10GW

1.5 Costs associated with active management

Energy custailed (GWh/year 160

Figure 1-8 Energy curtailed for non-intermittent generation

1.6 Benefits of active management in rural networks

Figure 1-9 Ranges of reinforcement cost of upgrade in rural areas

1.7 Benefits of active management in urban networks

Table 1-8 New switchboard cost

• 0% headroom; in this case the introduction of DG at 11kV requires the upgrade

0% 796 0 398 0 398 0 398 0

Figure 1-10 Ranges of reinforcement costs in urban areas

Reinf 75.14 0 37.57 0 37.57 0 37.57 0

Reinf 75.14 0 37.57 0 115.82 40.68 39.17 39.17

Reinf 75.14 0 37.57 0 115.82 40.68 95.53 95.53

Reinf 0 0 37.57 0 115.82 40.68 39.17 39.17

Reinf 0 0 37.57 0 115.82 40.68 95.53 95.53

1.8 Effect of DG on distribution losses and distribution network

Passive management Active management

1.8.2 Distribution network capex and DG

Table 1-14 Potential value of DG in replacing distribution network assets (£M)

Replacement value of DG (£M)

For low densities of DG penetration at 11kV, the benefits obtained in asset

Micro CHP electric generation 0.8

Figure 1-15 Normalised output of micro CHP

Figure 1-16 Normalised output of PV

1.10 Summary of the effect of DG connections on UK networks

Table 1-21 Incremental replacement benefit of DG (£/kW)

DG penetration Low density High density

Incremental value of Micro-CHP on network capacity replacement is shown as Table

Table 1-22 Incremental benefit of Micro-CHP on replacing distribution network

Incremental benefit (£/kW)

2.1.1 0.4kV network model

Table 2-1 Models for 20/0.4kV rural and urban substations

2.1.2 20kV network models

Table 2-3 Models for 110/20kV rural and urban substations

2.1.3 Load profiles