C I R E D 21 st International Conference on Electricity Distribution Frankfurt, 6-9 June 2011 Paper 1076 Paper No 1076 1/4 FROM FUEL BASED GENERATION TO SMART RENEWABLE GENERATION: PRELIMINARY DESIGN FOR AN ISLANDED SYSTEM. PART II: SELECTION OF FUTURE SCENARIO AND ECONOMICAL ISSUES Valentina COSENTINO (1) , Salvatore FAVUZZA (1) , Giorgio GRADITI (2) , Mariano Giuseppe IPPOLITO (1) , Fabio MASSARO (1) , Eleonora RIVA SANSEVERINO (1) , Gaetano ZIZZO (1) (1) Department of Electrical, Electronic and Telecommunication Engineering (DIEET), Università di Palermo, Italy. E-mail: favuzza@dieet.unipa.it, cosentino@dieet.unipa.it, ippolito@dieet.unipa.it, massaro@dieet.unipa.it, eleonora.rivasanseverino@unipa.it, zizzo@dieet.unipa.it (2) ENEA Research Center, Portici (NA), (Italy). E-mail: giorgio.graditi@enea.it ABSTRACT The subject addressed in this paper is the analytical study of the transition of the energy generation system for a real MV/LV distribution system from a ‘fuel based’ one to a distributed and smart ‘renewables based’ one. The paper outlines the economical issues related to such transition from one type of system to the other and it is the prosecution of a companion work addressing the technical topics concerning this subject. The study is carried out for a real islanded MV/LV distribution network. INTRODUCTION As it was underlined during the 2009 Major Economies Forum on Energy and Climate, “moving to a low-carbon economy provides an opportunity to promote continued economic growth and sustainable development as part of a vigorous response to the danger posed by climate change” [1]. Thus an urgent need is identified for the development and deployment of clean energy technologies. In this framework, the generation, delivery and usage of electricity represents a key issue and the development of the so-called smart grids has the potential to greatly improve the efficiency of the electricity network, providing for economic and technical values as well as for significant environmental benefits. However, the electricity generation still strongly depends on fossil fuels and the infrastructure used to transmit and deliver electricity to consumers is also relatively inefficient. As a result, electricity accounts for a significant share of the carbon emissions generated by energy consumption. In this context, the subject addressed in this paper is the analytical study of the transition of the energy generation system from a ‘fuel based’ one to a distributed and smart ‘renewables–based’ one. The paper is the prosecution of a companion paper [2], which focuses the technical issues related to such transition for a real distribution system. The chosen test power system is the MV/LV distribution network of the Island of Pantelleria (a little island of the Mediterranean Sea). The study was carried out in different phases. Firstly the test system was studied in details, considering all the electrical and topological features as well as the existing technologies for metering and automation. The second phase was aimed at identifying the local natural energy sources. Finally, the relevant energy transformation systems were suitably sized in order to meet the energy demand. The minimum and maximum sizes of the plants were hypothesized, taking into account the particular features of the system, the geographic location, the environmental constraints, the availability of space and the potential social acceptance. Starting from this, different scenarios were defined for the transition from the fuel based generation to the smart distributed renewable based one. The control system was also designed and the main control functions as well as the telecommunication system were hypothesized considering the relevant features of the installations. For each scenario different simulations in normal working conditions and during outages were carried out. The obtained results were analyzed, putting in evidence the technical and environmental benefits of using smart technologies and renewable energy sources. In this paper, the economical issues are outlined, which are related to the transition from one type of system to the other. Benefits include environmental issues, incentives and other benefits deriving from the idea that the energy system can be truly integrated over the territory. The costs-benefits analysis is carried out for a specific scenario chosen among the ones proposed in [2]. In the paper, firstly the main features of the test system are recalled and the selected scenario is described for the transition from fuel based generation to smart renewable generation. Secondly the approach for the costs-benefits analysis [3] is described and the obtained results are presented and discussed. FUTURE SCENARIO TO SMART RENEWABLE GENERATION. THE CASE STUDY. As detailed in [2], the MV/LV distribution network of the Island of Pantelleria is currently supplied by a diesel power plant, with both electric generators and turbines, whose total installed power is of about 20 MW. The energy demand is of about 44 GWh/year, the 56% of which is during the summer months (because of the tourists influx). The peak of the power demand varies from a minimum value of about 3 MW on January (at about 3:00 am) to a maximum of 7-10 MW on August (at about 9:00 pm). The renewable sources which can be introduced in the Island of Pantelleria were identified to be the photovoltaic, wind, geothermal, waste and thermal solar plants [2].