Case Study on the Socio-Economic Benefit of Allowing Active Power Curtailment to Postpone Grid Upgrades

The penetration of distributed generation is rapidly increasing in the power system. Traditionally, a fit-and-forget approach has been applied for grid integration of distributed generation, by investing in a grid capacity that can deal with worst-case situations. However, there is now increasing interest for the possible cost savings that can be achieved through more active network management. This paper presents a case study on the possible socio-economic benefit of postponing a grid upgrade in an area of surplus generation. Two alternatives for grid integration of an 8 MW run-on-river hydro power plant in the southern part of Norway are investigated: (i) grid upgrade; and (ii) active power curtailment whenever needed to avoid network congestion. This study shows that cost savings corresponding to 13% of the investment cost for the grid upgrade is possible through active power curtailment.