Assessing the Impact of Incentive Regulation for Innovation on RES Integration

Investing in innovative Smart Grids (SGs) technology can reduce overall investments in distribution systems with unpredictable renewable energy sources (RES). Regulators should, therefore, decide what incentives are desirable and design a flexible economic regulatory framework able to encourage distribution system operators (DNOs) to decide for innovation in the SGs. An innovative method that can support the regulators in encouraging RES exploitation by determining the right incentives to favor investments in innovation in an electrical distribution network is proposed in this paper. The method allows stakeholders like regulators, distribution companies and developers evaluating the long-term economic effects of their decisions. The effectiveness of the proposed method, based on non-dominated sorting genetic algorithm (NSGA-II) and on multi-period optimal power flow (MP-OPF), is verified on an 84-bus network.