About the project:
The developments of Smart Grids alter the roles and responsibilities of distribution network operators (DNOs). One of the main effects is the change in cost structures from CAPEX-based copper investments to OPEX-based smart network operation to optimize utilization of existing assets. Flexibility and smartness are required to compensate for the increasing amount of intermittent supply from renewable energy sources. DNOs in Germany are subject to incentive regulation and face a revenue cap determined the the German "Anreizregulierungsverordnung", in short: "ARegV".
The most recent ARegV amendment, which comes into force in 2019, offers additional incentives for the necessary network investments through yearly capital cost adjustments. But are these approaches sufficient to meet the new requirements of digitalizing and utilizing flexibility potential needed to facilitate the energy transition? How can incentives for research and development be promoted more effectively? Thinking one step further, the question is how the conceptual development of regulation towards an "ARegV 3.0" should look like.
This research project analyses misaligned incentives for DNOs regarding new roles and responsibilities, OPEX-CAPEX-distortions and R&D activities. This analysis will be based on the development and refinement of a network model and a regulatory model. Combining both models allows to account for the interaction between physical network requirements on the one hand, and economic aspects from both the perspective of society and network operators on the other hand.
01/2019 - 12/2020