Effects of Further Integration of Distributed Generation on the Electricity Market

Environmental concern leads to legislation to stimulate the further integration of renewable energy in the Dutch electricity supply system. Distributed generation is suited for the integration of renewable energy sources. Furthermore it can be used to generate both heat and electricity in a more efficient way using muCHP. Unfortunately, the additional integration of distributed generation has some negative consequences for the organisation of the electricity market. Programme responsible parties have to set up E-programmes which describe trade amongst them. Due to the higher unpredictability and uncontrollability of distributed generation, the E-programmes tend to be less accurate. This results in imbalance between supply and demand of electricity which has to be settled by the transmission system operator. This leads to extra costs for the programme responsible parties which could finally result in a drawback for the integration of renewable energy sources. Therefore market based solutions have to be created.