Business opportunities and dynamic competition through distributed generation in primary electricity distribution networks

In this paper, for a real electricity distribution network, an assessment of business opportunities to invest in distributed generation (DG) is performed through a simulation based on a full representation of three medium voltage (12 kV) feeders. The three feeders representation includes 1062 sections of conductors with 13 different sizes. The economic assessment focuses on both, the incentives of the incumbent distribution company and those of a new entrant. The technical and economic impact on losses, reliability and voltage regulation in the network area are verified. The DG solution analyzed determines a business opportunity for new investors where end users are also benefited. This work calls in the debate on the need to reformulate the current regulation model on electricity distribution, by defining clear rules to incorporate DG to the existing network, and to enable any agent to develop the proposed business. DG success depends on the location of adequate sites to strategically establish few DG units being a substitute to network expansion.