Renewable capacity investment planning under distribution grid hosting capacity uncertainty via Conditional Value-at-Risk

Abstract

Electricity distribution grids have been identified as a potential bottleneck for the rapid rollout of distributed generation. This paper assesses the impact of relaxing the hosting capacity (HC) calculation criteria on the expected profits of generation capacity portfolios. Additionally, the potential of combining HC relaxation with hybridising renewable generation technologies is quantified. The methodology accounts for uncertainty surrounding HC, renewable resource availability, and market prices. The investor risk is represented via Conditional Value-at-Risk. The case study points out that the relaxation of HC calculation criteria unlocks the electricity grid's capacity to absorb more energy and incentivises the increase of installed generation capacity for maximising investor profits. Moving from a contingency-restricted static HC to a dynamic HC definition leads to an additional energy injection of 65, increasing average investor profits by 64. Combining the HC relaxation with hybridisation increases the optimal portfolio capacity by 127 and average investor profits by 75. Sensitivity analyses are performed to assess the robustness of the results. The results highlight the potential of unlocking electricity distribution grid capacity by relaxing HC calculation criteria while guaranteeing profitability for investors.