Regulatory Matters Affecting Distribution Planning with Distributed Generation

Under the present European directive concerning common rules for the internal market in electricity, distribution companies are not allowed to own Distributed Generation (DG) but encouraged to include it as a planning option to defer investment in traditional grid reinforcements. Distribution system operators (DSOs) have used the provision of capacity contracted to DG as a viable alternative under current regulatory arrangements. In this paper the topics bonding DSOs and DG owners under the present regulation will be explored and a planning structure that considers Distribution Capacity Contracts (DCCs) as a planning option will be proposed. This will serve as a road map for DSOs to implement its preferred planning tools in an optimization context, considering costs of investment, reliability, operation, and capacity provision while complying with current regulation.