Distributed generation in electricity networks : benchmarking models and revenue caps

Abstract

The main focus of this thesis is the Norwegian Water Resources and Energy Directorate’s regulation model for the grid companies in Norway. We have taken a special interest in distributed generation and how the model compensates the companies for including this kind of production. We analyze in depth how one distributed generation project affects the revenue cap of a few companies, as well as the effect of future potential changes to the industry and model. We found that the project is very lucrative, but that the underlying assumptions are sensitive to changes in the industry. We also looked at a possible future regulation model, in which the project is even more lucrative, and where the data are less sensitive to changes in the industry. We also analyze the effect of changing some of the model parameters (e.g. rho) and illustrate the effects of charging investment contribution