TABLE OF CONTENTS As discussed in Chapter 1, the presence of embedded generation (EG) in distribution systems alters radically the way these networks should be viewed from both technical and commercial vantage points. This is because EG effectively turns distribution networks from passive networks with unidirectional power flows from higher to lower voltage levels into active networks with multidirectional power flows. This change challenges the validity of traditional distribution network planning, operation and commercial practices, in which distribution networks are treated as passive. For the value of EG to be appropriately recognised and hence its development encouraged, it is essential to factor the active nature of distribution networks with EG into all commercial as well as technical operation and planning activities.
An essential condition for competition to develop is open access, on a non-discriminatory basis, to transmission and distribution networks. The central issue in the concept of open access is setting an adequate price for transmission and distribution services as this affects future siting of generators and loads, network operating costs and service quality delivered by the networks, and strongly influences further network development. Under such a scenario, there is ever growing pressure for all components of costs to be clearly identified and assigned efficiently and equitably to all parties avoiding temporal or spatial cross-subsidies.
To facilitate fair competition between various generators, central and embedded, setting of appropriate connection and use of transmission and distribution system tariffs, as well as an equitable loss allocation policy, is essential. Due to its location,...
