Renewable Energy Sources and Responsive Demand. Do We Need Congestion Management in the Distribution Grid?

Abstract

Possible congestion management mechanisms for price-responsive electric vehicle demand in electricity distribution networks are investigated. Because a high penetration of renewable energy sources weakens the correlation between wholesale electricity prices and network demand, cost-minimizing electric vehicles may cause high peaks in network load. Managing congestion is not costly in theory but difficult to implement efficiently. Grid tariffs that are fixed ex ante, based on network load, were found to make the problem worse compared to the base-case scenario of flat tariffs. An optimal dynamic grid tariff yields desirable outcomes but is difficult to determine in case of realistic forecasting uncertainties. An iterative approach of a distribution grid capacity market has practical barriers related to IT infrastructure and computational requirements. Advance capacity allocation is more straightforward to implement, but the inter-temporal constraints of the electric vehicles continue to pose a challenge.