Grid integration remains one of the key challenges related to the worldwide expansion of distributed renewable energy systems. This paper presents innovative measures for increasing the hosting capacity of distribution grids with a focus on the medium-voltage grid, based on representative interviews with leading large-scale distribution system operators (DSOs) from Germany. For grid optimization, DSOs have implemented dynamic voltage control in substations, adapted the grid structure for renewables, applied the “N minus zero” rule for planning grid operation and used the capability of renewable energy systems to provide reactive power. For grid expansion, DSOs have installed voltage regulators, voltage-regulated distribution transformers, substations used exclusively for renewables, and express feeders that connect substations with the generation centers. This practical experience should also prove relevant for other countries currently planning the expansion of distributed renewable energy systems.

This paper investigates the interplay between the German incentive regulation and renewable capacity integration. A comprehensive review of the current incentive regulation scheme and its 2016 amendment is first presented. Then, results of ten representative interviews with large-scale distribution system operators are analyzed. Firstly, all necessary grid integration measures could so far be implemented. Secondly, creating proper incentives for intelligent operating equipment to partly substitute conventional grid expansion remains a challenge. Thirdly, the new curtailment regulation of 2016 is welcome, but will not become a substitute for grid expansion as long as renewable integration rates are high. Moreover, the discussions on further improvements to the incentive regulation scheme reveal a distribution conflict between grid operators and grid users.

In an international context, auctions are becoming increasingly common as a support scheme for renewable energies. In this case study, we analyze the Brazilian experience with wind power in the period from 2009 to 2015 with regard to the development of auction prices, rates of completion and market concentration. Inflation-adjusted auction prices in Brazil decreased by 54% until the end of 2012, before subsequently growing again to 87% of the first round price. The declines in prices can be attributed to the increasing experience of actors and the increasing level of competition among project developers, investors and turbine manufacturers. Various factors played a role in the price increase, including both regulatory changes such as a modification of grid connection terms, as well as external factors such as the falling value of the Brazilian real against the US dollar. Only 14% of wind projects from the first eight auction rounds were completed on schedule. The reasons cited for this include delayed grid connections, delays resulting from environmental feasibility permits, supply bottlenecks for wind power plants, the bankruptcy of the turbine manufacturer IMPSA or delayed financing approval by the Brazilian development bank BNDES. However, the number of project cancellations is low to date, so that a final rate of completion of between 89% and 98% is likely to be achieved. The number of owners of wind power projects has increased from 16 to 49 actors. The market share of the five largest owners has declined from nearly 60% to 37%. The ratio of pre-qualified to awarded capacity was consistently at over five, and the Herfindahl Index suggests an unconcentrated market. These findings indicate that the level of competition is sufficient to ensure free price formation in the market. The owners are primarily large, financially strong project planners, energy providers or investment firms.

Tenders are a fast spreading instrument to attract and procure new generation capacity from renewable energy sources. However, there is a need for current analysis of experiences as in many countries tenders were introduced only few years ago. The objective of this study is to provide an up-to-date comparison of tender results for wind power and photovoltaics in Brazil, France, Italy and South Africa. We analyze and discuss rates of completion, market concentration and auction prices, based on data and literature research as well as expert interviews. Data on project status shows that rates of on-schedule completion are well below 100% ranging between 14% in Brazil and 41% in South Africa (wind). However, final rates of completion of 100% are possible (South Africa). With exception of France current data suggests cancellation rates of less than 5%. A systematic connection between project cancellations and the instrument of tenders could not be identified. The market share of the five largest owners differs largely between the countries and ranges from 33% (Italy) to 70% (South Africa). Despite the high level in South Africa, the significant oversubscription of tender volumes suggests that free price formation likely was not constrained. Nevertheless, small actors (< 50 MW total capacity) are rare in Brazil and South Africa. For Italy their share cannot be determined due to lack of data. In all countries except Brazil auction prices have continuously fallen by 33% (Italy, wind energy) to 76% (South Africa, photovoltaics). In Brazil, the auction price increased from auction round eight to 14 from 50% to 85% of the first auction price. However, auction prices are highly dependent on factors outside of the support scheme of tenders (e.g. interest rates), so that their evolution and level are not a suitable indicator to determine whether tenders lead to minimal support costs.

Renewable energy auctions are gaining popularity worldwide. However, practical experiences remain ambiguous. This holds especially true for on-time implementation rates. In Brazil, only 17% of the awarded capacity in the first ten auction rounds reached commercial operation within the set out deadline. In this article, we investigate the causes for these delays and discuss potential mitigation measures, based on expert interviews and extensive data analysis. The most severe delays were caused by expansion to the transmission grid. Delays in the supply of wind turbines also led to significant project setbacks. Other factors could be considered of minor relevance, but have led in individual cases to significant delays. These include factors related to project financing, project or environmental licenses, logistics, land-use conflicts and poor project management. Brazil effectively reduced delays caused by transmission grid expansion through amendments to the auction design. Our analysis also shows that options to further mitigate delays through an advanced auction design are limited, as they lead to conflicts with other energy policy objectives, e.g. local production of wind turbines, or because the delays are caused by factors beyond the control of the project developers.

The integration of rooftop photovoltaic systems in the low-voltage distribution grids has become a major international trend, helped by the sinking prices for photovoltaics. One of the key questions revolves around the technical challenges brought about by the grid integration of these decentralized systems. This paper therefore analyzes the substantial practical experiences of ten representative German distribution system operators, who play a leading role in this field. Our findings show that grid expansion measures are primarily undertaken to ensure compliance with the permissible limits for voltage and current. Grid optimization measures represent the most economical initial step and include, for instance, changes in grid structure and wide-area control. Once their potential is maximized, classic grid expansion measures such as laying parallel cables are implemented. In individual cases, the low-voltage grid is reinforced by so-called intelligent operating equipment such as voltage regulators or voltage-regulated local distribution transformers. Moreover, improved grid planning measures lead to a better use of the available low-voltage grid capacity. The practical solutions successfully implemented by German distribution system operators should also prove relevant for other countries that are currently planning the deployment of decentralized renewable energies.

Regulators worldwide are aiming to increase system flexibility by leveraging the untapped potential of demand response. In this article we review and compare the literature on current practice and thinking about the role of demand response in three distinctly different markets that represent leading global examples of demand response: two regional electricity markets in the United States (PJM and ERCOT) and the national market in Germany. Furthermore, we describe the share of demand response in each market segment and the corresponding market design. We found, firstly, that interruptible loads and emergency generators (demand response) are used as a contingency reserve only, for no more than 30 h per year. Secondly, the share of demand response is about 4 % of the unforced capacity requirement (including emergency generators). Thirdly, the discussion of demand response also shows that there is a lot of uncertainty on how an appropriate level playing field between flexible resources should look in detail. Nevertheless, regulators are aiming to further enhance the reliability and competiveness of demand response programmes.