DOC4.3

EXECUTIVE SUMMARY

This document tries to resolve the issue related with the market around microgrids.

In this way, an economic-technical analysis has been done, first, analyzing  the current spanish electric system situation, later on, acquiring complexity based on a forecasted evolution developed by these networks in the next future.

Through this study development, this general conclusions have been acommplised:

FIRST.- Price signals coming from the system as a ‘key input’ for microgrid management have been identified. The decision algorithm used by the microgrid manager, should consider some other ‘key points’ like assets, topology, etc...

SECOND.- Demand management mechanisms are intended to increase economic eficiency and negative impact reduction coming from electric energy consumption. Different demand management mechanisms are observed through tariffs
depending on temporal proximity (RTP, CPP and TOU). 

At the same time, other economic mechanisms exist. They use different methods for setting up prices, like DRPs (through ‘lowering’ load retribution) and interruptibility. 

Price signals as a ‘driver’ management network in the next future is so important. This is showed within the  standarization Smart Grids process promoted by EEUU government wich has published a preliminary document identifying a standard price model development as a priority task.

THIRD.- Analyzing the initial situation in Spain, a conclusion is reached, demand management systems could be reduced to this mechanisms, first, hourly discrimination, which stands for around 20% of consumers, consisting of a ‘kind of’ TOU tariff with a temporary discrimination pretty high and an annual fixing horizon; second, interrumptibility, which is just for 200 big consumers. 

It is also necessary to increase this policies. These are the reasons: a social rejection, wich grows up every time a new electric infrastructure is build up, besides energy demand keep on growing.

A high integration for non-managed distributed generation demand is forecasted, as well as integration, for the next years, of electric vehicles demand within the system. 

These reasons make necessary in a long term scenario a technical evolution for the electric network toward the ‘Smart Grid’ concept. At the same time, ‘consumer’ role will change into ‘customer’, because homes, stores, office buildings and factories will integrate generation and accumulation, against  pure consumption.

FOURTH.- An analysis for economic basis for management mechanisms has been done, showing through a simplified model that real costs transmision implies an economic eficiency for the industry, as well as negative external reduction.

Considering the above mentioned, a set of tools for demand management oriented to drive the new services provided by the clients within the smart grids environment are proposed.

FIFTH.- Technological network evolution is identified as a key point in the path towards demand managing mechanisms implementation studied in the first part of this study. This network evolution to the “Smart Grids”, allows, in this way, to implement economic managing mechanisms analized within this study.

Furthermore regulatory evolution is identified as a new key point for this mechanism implementation, being necessary to consider in its development concepts like consumers fitting or tariff design. Additionally, from the system operators point of view, implementing some other mechanisms like interrumptibility could results on security supply strengh. If an urgent issue occurs, these alternative mechanisms shows up like a very important tool.

SIXTH.- In this document, Smart Grid conceptual model has been exposed by EPRI within the standarization process acomplished by NIST. Through this model analysis, a conclusion is reached, microgrids could be considered as a small scale ‘Smart Grid’.

Within Smart Grids environment, network is setted for new services creation (additionally to demand management) through TICs and load electronic integration. In this way microgrids’ performance plays a key point through their managers.

SEVENTH.- Economic mechanisms are not a management tool anymore and change into an additional services tool for demand management itself.