A Lack of Unbundling A Market Barrier for Distributed Generation? ENERDAY 2006 Stephanie Ropenus Risø National Laboratory www.risoe.dk
Structure
• Introduction to Unbundling • Current state of unbundling and DG penetration
• Interplay with regulatory framework • Impact of regulation - examples ENERDAY Dresden - 21 April 2006
Unbundling of DSO I Unbundling
DG-operator
Unbundling
Transport services
Transport services
DSO
TSO
System services
System services
Source: adapted from DG Grid
ENERDAY Dresden - 21 April 2006
Reasons for unbundling • Fair and non-discriminatory access • Equitable conditions for new entrants • Prevention of • cross-subsidies • diffusion of market sensitive information to • •
affiliated companies excessive tariffs aggravation of access by any other means for new market entrants
• Implementation • Legal unbundling may be postponed until •
1 July 2007 Exemption for DSOs serving less than 100,000 customers ENERDAY Dresden - 21 April 2006
State of unbundling (2003-2005)
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK
2nd BR 04/2003
3rd BR 03/2004
A L L M A A A M L A M A L L L
A L L A A A A M L A L M L L L
4th BR 01/2005 L L L A M A N M L M L A L L L
ENERDAY Dresden - 21 April 2006
Unbundling 10/2005 (DG Grid) L L L A M L L M L M L A L L L
L=Legal M=Management A=Accounting N=No unbundling
Sources: Benchmarking Reports, DG Grid
Implementation of unbundling of DSOs
Country Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK
Separate board of Directors without Unbundled Publication Directors regulatory Separate Separate of from other accounts Audit of headquarters corporate unbundled unbundled group with (Y/N) presentation guidelines accounts accounts companies? Total rating (Y/N) (Y/N) (Y/N) (Y/N) out of 6 (Y/N)
N Y partly N N N N N N N N Y N N partly
partly Y partly N N N N Y N N Y N Y N partly
N Y Y Y Y Y N Y Y N Y Y Y Y Y
Y Y Y Y Y Y Y Y Y partly Y Y Y Y Y
Total Compliance 4 7 12 15 of EU-15 MS Source: Technical Annex to 2005 Benchmarking Report
Y Y Y Y Y N N Y N partly Y Y Y Y Y
partly N partly N N Y N N N N N N N N partly
12
4
3 5 4 3 3 3 1 4 2 1 4 3 4 3 5
Progress in unbundling • Situation ”rather less encouraging” • Delays also in functional unbundling • ”Implementation in letter” Ù ”Implementation in spirit”
• GREEN PAPER 2006 ”A European Strategy for Sustainable, Competitive and Secure Energy”
ENERDAY Dresden - 21 April 2006
st ria
la nd
re ec e
Ire
G
er m an y
ce
ENERDAY Dresden - 21 April 2006 U
K
Non-controllable
Sw ed en
Controllable
Sp ai n
Ita ly Lu xe m bo ur g N et he rla nd s Po rtu ga l
G
Fr an
Fi nl an d
Be lg iu m D en m ar k
Au
DG share in total electricity capacity
Present share of DG
40%
DG total
30%
20%
10%
0%
Source: DG Grid
Unbundling and DG share Legal Unbundling
High DG share (> 20%)
Medium DG share (10%< DG share < 20%)
Low DG share (DG share < 10%)
Denmark Netherlands Spain
Austria Germany Italy Sweden UK
Belgium (Greece)
France Ireland Luxembourg
Management Unbundling Accounting Unbundling
Portugal
(Finland)
• No direct relation apparent, but • lead times • problematic to evaluate unbundling • Impact of insufficient unbundling dependent on regulatory framework!! ENERDAY Dresden - 21 April 2006
Source: based on DG Grid data
Interplay of Unbundling of DG operator & DSO and National Regulation Unbundling
Unbundling Connection charges
Use of system charges
DG-operator Use of system charges
Support scheme
Electricity sales
Energy Energypolicy policy
Transport services
Transport services
DSO
TSO
System services
System services
Regulatory incentives
Heat sales (CHP)
Regulator Regulator Source: adapted from DG Grid
ENERDAY Dresden - 21 April 2006
The Exemption Clause Unbundling No of DSOs DSOs with less % of connections than 100,000 in this category connections Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK
Connection charges • Different approaches: deep, shallow, shallowish
• Impact on commercial viability of DG project
• Locational signals vs. socialisation of costs • Lack of unbundling may aggravate network access in case of • deep charging • low level of transparency on calculation method ENERDAY Dresden - 21 April 2006
Ambiguous effect of unbundling on DG Ù DSO
• Unbundling to establish equitable access • BUT: DG adds increased complexity to the network and may imply lower revenues for DSOs
• Unbundling deprives DSOs of operating DG units • Lack of incentive for DSO a major barrier for DG • Need for regulation: proportionate sharing of costs • Different responses to changes by incumbents ENERDAY Dresden - 21 April 2006
