voltage common topologies.
LV topologies are much more diverse than MV's. LV networks may have grown in a not very coordinated way, depending on the extension and specific features of the service area, the type, number, and density of points of supply (loads), country‐ and utility‐specific operational procedures. Each SS typically supplies electricity to one or several LV lines, with one or multiple MV to LV transformers at the same site. LV topology is typically radial, as in Figure 1.4, having multiple branches that connect to extended feeders. LV lines are typically shorter than MV lines. LV Distribution systems can be single‐phase or three‐phase. In Europe, e.g., they are usually three‐phase, 230 V/400 V systems (i.e. each phase has a rms [root mean square] voltage of 230 V and the rms voltage between two phases is 400 V).
1.2.2.1.4 Consumption Points
Customers' concurrent energy consumption patterns drive the needs of the electric power system. Thus, the Consumption Points are extremely relevant from a technical perspective. Traditionally, electric grids have been oversized due to the difficulties to measure, understand, and modify these consumption patterns. However, behind a Consumption Point, customers can be found, and as stakeholders of the system, their contribution to it needs to be considered.
Customers need to receive a reliable and agreed‐quality electricity service, as they connect their loads to the grid and must be guaranteed that the supply will be available. These load functioning may demand a service with different requirements depending on the nature of the customer (residential, commercial, or industrial).
Customers must be charged for their use of the system, and utilities have developed technology and processes to determine the consumption of electricity at the grid edge, where Consumption Points are located. These metering systems (see Chapter 5) have been based on meters installed on the border between the grid and each customer. These meters have traditionally been the only visible connection of customers with the utility.
Figure 1.4 Low voltage common topologies.
However, the role of the customer in electric power systems is changing, and it needs to gain visibility within the utility. In a similar manner, the electric power system must be visible for customers to the extent that his active participation in the system is required (see Chapter 5).
1.2.2.2 The Grid from a Regulatory Perspective
Regulation is instrumental to understand electric power systems. In essence, Regulation [4] is the series of principles or rules to control individual and collective human behavior. Regulation, with or without the authority of law and with an ex ante intention, is used to control, direct, or manage an activity, organization, or system. From the legal perspective, regulation is a form of secondary legislation issued under the authority of primary legislation, whose effective application it is to secure.
Governments regulate industries to improve their performance, be it to guarantee that no agent goes against the common interests, to steer an industry's performance toward improving “general welfare,” to protect consumers, and to protect investors from the State. Regulation is implemented through the design of rules, the structuring of the industry, and the supervision of agents' behavior and industry performance.
The core underlying criterion supporting the regulation of electric power systems is the maximization of social and environmental welfare in the production and consumption of electric power. This involves several fundamental concerns. First, efforts should be devoted to minimizing the costs incurred in providing the service (both investment and recurring costs). Second, the quality of supply must also be satisfactory (including reliability – security in short‐term operation, and adequacy for long‐term evolution, and “product” quality factors). Third, sustainable development, defined as the one meeting the needs of today without compromising those of the future, is needed. All these concerns may be contradictory and trade‐offs should be established.
1.2.2.2.1 Regulatory Models
Regulatory models for electric power systems are different in every country, although they often deal with two dimensions that classically determine how the model is implemented:
Which activities, of all the activities needed in the electric power system, need to be separated from the others? These activities are to be unbundled.
Which activities can be performed on a competitive basis? These activities can be deregulated or regulated in a different way.
These two dimensions create the different models. In one extreme, if none of the activities are unbundled or deregulated, we have the vertically integrated monopoly. In the other extreme, the activities (including Generation, supply – Transmission and Distribution – and energy trading) are said to be vertically disaggregated and are performed competitively.
In a vertically integrated monopoly, electric utilities are awarded a territory to supply electricity to. Thus, the utilities own and operate all the generation and network assets in those territories, and they plan and implement the expansion of production and network capacity under the guidelines and authorization of the regulatory authority, within a remuneration for the utility based on the incurred cost of service (including a rate of return for invested capital), an agreed price for end‐users within a satisfactory reliability level, and with the allowed environmental impact.
In an organization of the electric power systems where activities are vertically disaggregated, the competition is introduced through wholesale electricity markets, which are open to all generators (incumbents and new entrants) and to all consumer entities. In a wholesale electricity market, the electricity market price is fixed by competing forces and serves as a reference for medium‐ and long‐term contracts of different types. The agents trading on such markets are generators, different categories of supplier companies representing consumer interests, or acting as intermediaries. In this context, consumers are clients free to choose the supplier based on the available commercial propositions.
The beginning of the power sector (nineteenth and the early twentieth century) was driven by private initiative and competition, as electricity was not yet a pervasive must for the Society. Soon, in most countries, the situation was superseded by strong governmental intervention in the form of public ownership or utilities as regulated monopolies. States in most countries assumed a heavy planning and intervention, being the sole regulator. The situation has remained like this until the 1990s, when unbundling and regulation of network activities has happened, to separate them from the business part that can be performed in a competitive way.
Nevertheless, even in highly deregulated environments, Transmission and Distribution grids are subject to the existence of business‐relevant regulation. These networks, part of the whole system, are considered natural monopolies, as they do not have characteristics that allow the provision of their services under a market‐based regulatory regime. Consequently, these networks have enormous market power, and this is the reason why these grid‐associated activities must at least be wholly independent of other competitive businesses within the electric power system (i.e., generation and retailing – offering electricity to end‐users). Thus, their remuneration must be regulated, and they must be obliged to provide open and nondiscriminatory
