In Europe, there is a sharp increase in reserve needs for coping with the variability introduced by a steadily increasing RES share in the generation. The big challenge is to extend the possibility of providing Ancillary Services (AS) – frequency and voltage control, congestion management, etc.) to entities connected to the distribution network.
All these issues have been addressed by the SmartNet European research project (http://smartnetproject.eu/), which aimed at comparing different TSO-DSO interaction schemes and different real-time market architectures with the goal of finding out which would deliver the best compromise between costs and benefits for the system. The objective of this three-and-ahalf year project (2016-2019) was to develop an ad hoc simulation platform which models all three layers (physical network, market and ICT), analysing three national cases (Italy, Denmark, Spain).

In addition to providing information on the main results obtained by the SmartNet project, this report include some information on the status quo of the procurement of ancillary services in selected countries. A questionnaire was formulated and distributed among the members of ISGAN Annex VI. The questionnaire contained the following questions:

• What system services are provided in your country (voltage regulation, frequency regulation, inertia, support to power quality…)
• Who is providing them (generators and/or loads?)
• Modalities to collect ancillary services: via markets, contracts, compulsory non-paid services… Please describe in detail.
• Are generators and/or loads located in distribution admitted to provide system services? If yes, how is TSO-DSO interaction carried out (please describe in detail)
• Are there plans from the national regulator to activate demand side management or to collect inputs from generators connected to distribution for the future? Which timeframe? Are pilot projects already active?

Highlights of 2018 include:

• ISGAN’s activities during the Nordic Clean Energy Week and the Clean Energy Ministerial (CEM9)
  • Workshop and high-level panel discussion on the Acceleration of Smart Grid deployment through innovative market design
  • Side event concerning Perspectives on Smart Energy Storage Systems
• Highly recognized public workshops in course of the programme of the ExCo meetings:
  • Public workshop on Smart Energy for Smart Cities, Newcastle, Australia, as part of the Newcastle Smart City Strategy (ExCo15, Newcastle)
  • 8th International Conference on Integration of Renewable and Distributed Energy Resources IRED2018 (ExCo16, Vienna)
• Thematic knowledge exchange projects (KTP): During ExCo16 in Vienna, a KTP workshop on KPIs in Public Support took place. A Summary of the event was published.
• Award of Excellence:
  • 4th ISGAN Award of Excellence (FY2018) focusing on Flexibility: Award ceremony took place during CEM9
  • 5th ISGAN Award of Excellence (FY2019) focusing on Local Integrated Energy Systems (Smart Microgrids) was launched at CEM9
• Bimonthly webinars organized by the ISGAN Academy and co-hosted by the Clean Energy Solutions Center
• Publication of several discussion papers, event summaries and policy briefs.
• Collaboration and co-operation with other IEA networks and CEM initiatives.

As it is necessary to be quick, regulatory changes will often lag, what is identified as preferable pathways, but these changes could be accelerated through Regulatory Sandboxes, which are able to verify effects of new regulatory instruments before actual implementation.

All energy systems, whether vertically integrated or deregulated, have some sort of regulatory or market oversight. Some of these regulations have been long established and originate from stem out of initial structures created around the turn of the 20th century. However, as the electricity grid transitions towards a more decentralized structure, with deepened engagement of end-users (including consumers) and involvement of a wider variety of other stakeholders and service providers, there is a need to enable testing of new regulatory structures that can better support integration of advanced smart grid technologies and business models.

This casebook provides detailed information on planned or implemented Sandbox Programs for Australia, Austria, Germany, Italy and The Netherlands. An overview of the previously well documented program in the UK is provided as well.

Hawaii is included as an example of another form of regulatory experimentation. In this case, one US state is experimenting with a performance-based method for tariffs which, if successful, can be rolled out as a regulatory innovation to other US states or other countries. The main focus of the casebook however is laid on experimenting to achieve the above mentioned innovation goals by means of sandbox projects.

Solutions providing advances in flexibility are of utmost importance for the future power system.
However, flexibility is not a unified term and is lacking a commonly accepted definition. The flexibility term is used as an umbrella covering various needs and aspects in the power system which complicates the discussion on flexibility and craves for differentiation to enhance clarity.

ISGAN Annex 6 has dedicated an activity on flexibility with the intention to support an increased understanding of the flexibility concept, proposing categorisation of flexibility needs in the power system.

This activity resulted in several publications with contributions from parties in: Sweden, Austria, Canada, France, Germany, Italy, Norway, and Switzerland.

• The final results and conclusions of this activity were presented at a dedicated ISGAN Webinar, November 2019.

• In the Fact Sheet: Grid Evolved – Power System Flexibility, the condensed knowledge from this activity, with collaboration with Mission Innovation, was published for the 10th Clean Energy Ministerial in Vancouver, Canada, May 2019.

• In the Discussion Paper (DOI: 10.13140/RG.2.2.22580.71047), the full report is provided from this activity, including description of the flexibility categories: Flexibility for Power, Flexibility for Energy, Flexibility for Transfer Capacity, and Flexibility for Voltage.

• The Leaflet: Power system flexibility – the ability to manage change presents an executive summary of the discussion paper, giving a good insight into the work. This leaflet was published for the ISGAN Conference The future of electricity markets in a low carbon economy in Stockholm, Sweden April 2019.

• The Scientific paper: Flexibility to support the future power systems, based on the discussion paper, was published for the CIGRE Symposium in Aalborg, Denmark, June 2019.

The purpose of this report is to give an account of a collaborative International Smart Grid Action Network (ISGAN) project on public support and funding to Smart Grid Research, Demonstration and Innovation (RD&I), with focus on the use of Key Performance Indicators(KPIs).

The main objective of this report is to assess the future data exchange and ICT requirements concerning the interaction of distribution and transmission networks, by identifying key challenges that deserve attention.

This report is based on a questionnaire regarding the ICT aspects of TSO-DSO interaction. The questionnaire contained questions regarding technical aspects (e.g. technical connection points between TSO and DSO in the countries), regulatory aspects, flexibility markets, drivers and barriers for TSO-DSO interaction as well as experiences from projects and lessons learned. The questionnaire was sent to the Annex partners and nine responses were collected. In particular Belgium, Germany, Italy, Finland, Sweden, United States, China, India and Austria have sent comprehensive answers.

Due to the integration of renewable energy sources, the interaction between TSOs and DSOs gets more and more important to handle the high volatility of generation and unexpected load growth in power grids. Additionally, new market mechanisms and the connected flexibilities require a closer interaction between TSOs and DSOs.

Smart grid technologies represent different ways to enhance the effectiveness of the power distribution and transmission system by making it possible to use existing power infrastructure more efficiently. Implementation of smart grid solutions could for instance, represent an alternative to investment in new power generation capacity or new power lines.
Many new smart grid technologies are available, but not yet deployed. In order to advance implementation, governments and other investors need decision support to evaluate investments in smart grid technologies.

Cost-benefit analysis (CBA) offers a systematic process for comparing the advantages and disadvantages of a smart grid initiative from society perspective.
This report presents a mapping and analysis of existing literature on social costs and benefits of smart grid solutions and identifies gaps in current guidance. The study also includes a review on how network regulation affects incentives to invest in smart grid technologies and an analysis on how CBA constitutes an important input to the design of the network regulation. The report also serves as a basis for selecting models and methods to be used by the Swedish Smart Grid Forum in order to assess different smart grid projects and applications.

Due to the multifaceted and broad nature of smart grid technologies, CBA of smart grid deployment is complex as smart grid technologies provide benefits on a system level as well as on the project level. Smart grid technologies are also under fast development, which lead to a lack of data and uncertainty when extrapolating results from pilot projects to the system level.

Energy and climate goals as those identified on the European level as well as on a national levels aim to increase renewable energy, improve energy efficiency and reduce carbon emissions. Smart grid technologies contribute to all these goals, not only directly but to large extent indirectly, which calls for comprehensive evaluation methodologies on a system level. Comprehensive analyses on the system level can provide input to CBA.
The aim of CBA is to identify all the gains and losses (benefits and costs) created by an initiative. The intention is to express the gains and losses in monetary terms irrespective to whom they accrue.

On a general level, CBA contains three mains steps. These are identification, quantification and valuation of the benefits and costs.