TSO-DSO coordination and market architectures for an integrated ancillary services acquisition : the view of the SmartNet project

The energy world is facing major challenges as fossil fuel generation is replaced with renewable generation, which is often characterised by variable behaviour. This increases the need for resources to be used to guarantee frequency stability, congestion management, voltage regulation and power quality. At the same time, an increasing number of flexible demand and storage systems is located at distribution level. These resources could potentially be available to provide network services if they are aggregated effectively. To achieve this, however, the roles of the diverse network stakeholders – transmission systems operators (TSOs), distribution systems operators (DSOs) and aggregators – should be reshaped. In tandem with this, the way real-time electricity markets are organised also needs to be adapted to reflect the new operating environment. The project SmartNet (smartnet-project.eu/) compares five different TSO-DSO interaction schemes and different real-time market architectures with the aim of finding out which one could deliver the best compromise between costs and benefits for the system. An ad-hoc-developed platform is used to carry out simulations on three benchmark countries – Italy, Denmark and Spain Conclusions are drawn on possible regulatory gaps both at European and national level. A Cost-Benefit Analysis (CBA) is implemented to compare the costs needed to implement the five TSO-DSO coordination schemes (e.g. to improve the system ICT) with the benefits drawn by the system. In this way, the SmartNet project aims at answering the following key questions: how should real-time markets be optimally organised for enabling flexible generation and load to provide their contribution to system services? which interaction scheme between a TSO and a DSO would prove the most efficient one? What concrete economic benefits could the system draw from this? what is the trade-off between these benefits and the extra costs for ICT deployment to implement these new schemes? what regulatory impact could all of this have on the present European and national regulation? which technological solutions could make it possible to realise a seamless monitoring and control of distributed energy resources (DERs), typically located in distribution? The present paper summarizes the achievements of SmartNet during the first two project years. Main focus is on the set-up of the simulation platform and on the modelling of the different components (transmission and distribution networks, ancillary services markets, aggregation processes, system regulations). The main information related to the expected 2030 Italian scenario (which will be object of simulation and cost-benefit analysis assessment later in the project) will be provided together with some preliminary reflections on ICT constraints and regulatory implications