Renewable Energy and Transmission Networks - Green Energy and Efficiency: An Economic Perspective - page 378

3.3 Regulation of the Connection to the Grid

Wind and solar generation have zero variable costs, and therefore a natural priority
in economic generation dispatch. On top of this, under some regulations RES-based
generation has traditionally enjoyed in many systems priority in the access to the
grid in real time regardless of the economic implications, which sometimes can be
negative. This may more easily occur when large amounts of RES-based generation
exist. Only when the grid cannot safely absorb the output of RES-based generation,
RES should not be allowed to produce.
In the long term, transmission capacity reserve may probably not need to take
place. Capacity reserve systems provide generators that connect to the grid with the
certainty that other, more ef cient, generators being installed afterwards in the same

node or area of the system (generation pocket) will not replace them in the energy
dispatch. This encourages the installation of these

rst generators. However,
capacity reserve mechanisms represent an obstacle to the installation of more
ef cient generators, since their connection in some interesting areas may not be

allowed, or they will be facing frequent curtailment.
Instead, those agents wanting to ensure access to the transmission grid at the
connection point of their choice shall be able to sign long-term transmission con-
tracts. These contracts would probably be of more use for RES-based generators.
Secondary markets for that products and “ use-it-or-lose-it ” clauses will ensure more

exible and ef cient use of transmission capacity than capacity reserves

mechanisms.

4 Allocation of the Cost of the Transmission Network

If intensive use of the best renewable resources is made, new generator connection
lines and related system upgrades are likely to be more expensive on average than
they have been historically. In addition, lines linking different areas in a region or
different regions will probably be larger as well, since RES-based generation will
probably be located far away from load centers. Hence, signi

cant investments will
take place in network assets to be used at regional or multinational level, i.e.
affecting more than one area or system. This implies that rules used to allocate the
cost of these lines among areas, regions and countries will be under scrutiny by all
systems in the region. Unless regulatory authorities in the different systems of a
region believe that they are paying a fraction of the cost of these lines that is
commensurate with the bene t they are obtaining from them, they will oppose the

construction of these lines. Then, network assets that are highly needed will not be
built.
Therefore, developing an ef

cient allocation scheme that sends appropriate
locational signals to new generators and loads is central to reducing the cost of
required network reinforcements, which will also be critical in achieving their