Responsibilities of distribution operators in relation to the energy and operational efficiency in the management of administration infrastructure, complying with the performance standard
Directive 27/EC/2012 regarding the energy efficiency is establishing as major obligation of the utility companies, their pursuit to improve the energy efficiency of the services provided to their customers.
This directive is establishing a common framework of measures for promoting the energy efficiency within EU in order to ensure in 2020 the achievement of the main objective of 20% target for the energy efficiency, and in order to further increase the energy efficiency following the said date.
This requires regulations designed to remove the energy market barriers and to overcome the market dysfunctions which are preventing the efficiency in the supply and use of electric power, as well as to establish national guiding objectives of energy efficiency for 2020.
As such, maximizing the operational and energy efficiency of the distribution infrastructure can be achieved by a series of well managed measures implemented by the distribution operators as the party bound by the said obligation:
- Inclusion of energy efficiency criteria in the network tariffs and in regulations;
- Empowering the national regulatory authorities to seek the energy efficiency;
- Incentives for the network operators – transmission system operators (TSO) and distribution operators (DO) – in order to improve the overall efficiency, including the energy efficiency;
- Defining the aggregators as a new player on the energy market and defining the virtual power points (VPP);
- Introducing measures enabling and developing the demand response (DR);
- Obligation to assess and improve the energy efficiency in designing and operating the electricity and natural gas infrastructure.
In this respect we are referring to the provisions of Art. 15 of Directive 27/2012, underlining as significant objectives:
Maximization of distribution infrastructure efficiency by a series of measures detailed in the Energy Efficiency Law, Law no. 121/2014 and PNAEE (National Action Plan for Energy Efficiency).
Establishing the role of internal energy market players:
- regulatory authority;
- transmission and distribution operators;
- other participants, like on-demand services providers.
Based on the measures recommended in Directive 72/EC/2009, the following aspects are underlined:
- supply of energy management services,
- development of pricing innovative solutions, or
- introduction of smart metering systems or smart grids, where applicable
- taking into account the long term objectives. Relevant long term objectives are the European objectives related to the percent of renewable sources energy in the final energy consumption, the energy efficiency and the reduction of greenhouse gas effects.
The regulatory authority will have to give adequate attention to the energy efficiency when executing its obligations, specified in the Directive and related to the distribution infrastructure.
The distribution operators (DO), as the party bound by obligations in the field of energy efficiency must mainly:
- ensure a secure, reliable and efficient distribution system;
- ensure the availability of all connected network services;
- define the methods for access and participation on the balancing services and other system services market.
As such, the network operators will also have to assume the obligation of neutral energy market facilitators, ensuring and promoting a functional electricity market according to the transparency requirements and without any distortions, based on an adequate operational and energy efficiency.
Future challenges of DO, as energy market facilitators, will be primarily implemented:
- Smart metering;
- Updating the distribution infrastructure by applying the smart grid concept;
- Efficient market processes:
- quick access to market data;
- rapid change of supplier;
- low transaction costs.
To this end, the regulatory authority is required to promote certain categories of adequate incentives for this type of investments, so the energy and operational efficiency will lead to competitive tariffs on the electricity market.
Smart grid involves huge investments made by the DO. At least at the beginning, the benefits will not be consistent with the investor’s costs. Thus, it is our opinion that the DOs must be encourages to invest in innovative technology and smart grid. In the absence of a strong commitment of the DO, there will be no smart grid. As such, the recovery of investment costs must be guaranteed to the DOs. In this case, the regulatory authorities are key-facilitators of a smarter future – the said authorities must empower DO to take-on an active role in the development of smart grid solutions.
Smart meters must ensure a two-way communication between users/ consumer and the services supplier/grid operator, promoting services which are facilitating the energy efficiency (Directive 2009/72/EC).
On one hand, customers are provided with exact and on-time information related to the energy and production consumption, thus enabling them to implement the measures for increased energy efficiency. On the other hand, Dos are provided with accurate data regarding the consumption patterns, thus enabling them to better manage and plan the investments in the grid.
In most cases, smart metering systems will be installed, owned and operated by the DOs.
According to the results of M/441 and M/490/CE mandates, DOs will ensure, in the field of smart metering and smart grid, a consistent development in the area of information technology and communications, a profitable implementation of efficient grid management and a harmonized and coordinated implementation for the operation of distribution operator management, removing the transaction costs.
For this purpose, the National Policy for Energy Efficiency (via the National Plan for ensuring energy efficiency) is establishing the objective related to energy efficiency improvement, guiding targets for energy savings, as well as the energy efficiency improvement measures required in all national economic sectors, with emphasis on:
- introduction of high energy efficient technologies, modern metering and control systems and energy management systems for constant monitoring and assessment of energy efficiency and forecast of energy consumptions;
- promotion of renewable sources energy in case of end-users;
- mitigation of environmental impact of production, transmission, distribution and consumption activities for all energy types;
- application of modern energy management principles;
- establishment of obligations for energy end-users, distributors, energy distribution system operators and energy retail sale companies;
- providing financial and fiscal incentives;
- development of energy services market.
As such, the following action lines are distinguished for the improvement of energy efficiency at the level of electricity market participants:
- A close connection to an efficient wholesale and retail market for balancing and procurement services.
- Facilitation of energy market entry for all types of players.
- A clear definition of the role of market players.
- Guaranteeing to all market players the access to the same set of vital information concerning the suppliers, prices and requirements.
- A sufficient harmonization and efficient organization of basic information requirements and business processes in order to adequately apply them and exchange data between the market players; including adequate control and audit of these processes and data exchanges.
- Simple and reliable exchange processes, which are not involving high costs for customers and suppliers.
- An open governance structure enabling the market players to shape the processes designed for information flow.
Current electric distribution grids will evolve to the distribution systems: congestion management, voltage control, information exchange, connection and planning of basic tools for service quality and security maintenance at the distribution level and that of an efficient operating distribution service at the level of performance standards established by the regulatory authority.