Distributed Generation and the Regulation of Distribution Networks

Electricity systems around the world are experiencing an increase in the amount of distributed electricity generation for a variety of reasons. In general the two main driving forces for a further penetration of distributed electricity generation in energy systems are market liberalisation and environmental concerns (Pepermans et al., 2005; Pecas Lopes et al., 2007). Distributed electricity generation allows electricity system actors more flexibility in dealing with changing market conditions and can have favourable environmental characteristics due to its renewable character (e.g. small-scale wind turbines and photovoltaics) or the efficient combination of electricity and heat production (e.g. small-scale combined heat and power (CHP) units). With an increasing attention for renewable electricity generation and energy efficiency improvements in energy policy the future will continue to see an increase in the share of distributed electricity generation in electricity systems.