Regulatory Pathways For Smart Grid Development in China
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The study’s recommendations describe institutional elements in the context of electric power sector regulation and has the objective to increase the understanding of the interdependencies of the institutional elements. In future work, the study results might be employed for designing very specific regulatory policies. The recommendations developed in this study focus primarily on the regulatory framework for smart grids and contains a quite detailed description of how the German electricity markets evolved. It also focuses on the effects of ambitiously expanding generation capacities of renewable energy sources (RES) on established electricity markets. The presented evidence will provide insights on how the regulatory framework in China could be designed to foster smart grids developments in the context of establishing electricity markets and expanding RES generation capacities.
period and financially regulates for any imbalance that arises. Clearing & Settlement Agent: Assumes liability for clearing and/or settlement of contracts and provides contractual counterparty within a Power Exchange and for over-the-counter (OTC) contracts. Trader: A person or entity that buys and sells energy goods and services in an organized electricity market (Power Exchange) or over-the-counter. Supplier [in the areas of energy market places]: Has a contractual agreement with end
connection of RES is currently lagging behind and a considerable amount of RES-E is curtailed. In this context, smart grid technologies are often seen as a means to reduce RES integration costs: Large-capacity battery storage systems facilitate the integration of centralized large-scale intermittent RES generation capacities of the type that are currently focused upon in China.1 Due to frequent network congestions at the local level, a considerable quantity of electricity generation from RES
into the Public Grid, itself enacted in December 1990. The EEG regulates a feed-in system that comprises four key elements: Fixed feed-in tariff: for each kWh produced and fed into the grid, a fixed price is paid which is higher than the wholesale market price for electricity. Take-up obligation: grid operators must buy the electricity from RES at all times and pay the feed-in tariff independently from current market prices. RES priority: RES has priority over non-RES in case of network
introduced by the European Commission in Directive 2002/21/EG. In this context, technology neutrality means that the regulator does not impose or discriminate in favor of a particular type of technology. This concept has been applied to several technological issues in Europe, for example with respect to the development of broadband internet, where the regulator left it open to the market to decide between the deployment of different technologies such as digital subscriber line (DSL), power-line
“Public Consultation on Use of Spectrum for More Efficient Energy Production and Distribution,” Eurelectic Response Paper, Brussels, 2012. 62. Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (BMU), “Act on Granting Priority to Renewable Energy Sources,” 2013. [Online]. Available: http://www.erneuerbare-energien.de/fileadmin/Daten_EE/Dokumente__PDFs_/eeg_2013_bf.pdf. [Accessed February 20, 2014]. 63. D. Ernst, “Toward Greater Pragmatism? China’s Approach to