Ivanka Dilovska: Electricity distribution networks will be at the center of the energy transition

The electricity distribution network has given Bulgarian consumers one year of free of charge energy. The efficiency of the electricity transmission network has increased 2.5 times since 2007, and network prices are much lower than in that year. This is due to the reduction of losses. However, this cannot continue. Investment and a change in the regulatory approach are required. Because the electricity distribution networks will be in the center of the energy transitioх, said the energy expert and member of the Management Board of the Institute for Energy Management Ivanka Dilovska at the conference "The European Green Deal and the Bulgarian Energy Transition", organized by EMI and the Diplomatic Institute at the Ministry of Foreign Affairs.

The green deal is not just about coal. On the contrary. Electricity distribution networks will be at the center of the energy transition. If this sector does not change, the energy transition itself will slow down. Moreover, the green deal is becoming more ambitious. Reducing carbon emissions by 55-60 percent is being discussed. This will result in the conversion of all other targets and higher levels.

In this situation, the target for RES also increases to 38-40%. It also applies to energy efficiency. This will lead to a request to increase the national contribution and to a change in the Bulgarian National Climate and Energy Plan. Each country faces the question of achieving the goals set in the green deal by at least 35%. This will lead to shocks and will require more money. It means revising all plans in order to achieve these new goals, Dilovska was adamant.

According to Dilovska, in order to keep up with the green deal, our country will have to undertake and implement a much bigger change, including for the electricity distribution networks.

The electricity distribution network is standardly developed in such a way so to ensure security and reliable supply of energy to people. Ultimately, its development depends on investment. However, with the green deal, new requirements for network design are emerging, she said. In this regard, the expert drew attention to the role of the electricity distribution network in the context of the connection of renewable energy sources.

Everyone is talking about renewable energy. It is expected to reach 60% in the energy mix. It is expected that 60% of new RES will be connected to the network. However, joining the network leads to fundamental changes for it. She is no longer passive. The movement is not only in the direction of consumers, but also in the opposite direction. This creates a need for local dispatch centers to perform this role, which is now performed by the transmission operator, Dilovska explained.

To maintain security of supply, the network will need storage facilities, she added.

In addition, it will also have to rely on consumption management. This will require the active participation of users in the management of the system. This can be done by requiring them to move their consumption from peak to quieter hours. Then the network will be able to develop in a much calmer way.

The entry of electric cars, electrification in transport and the participation of all users, in turn, will require a different type of information processing. Therefore, electrification and digitalisation will play an increasingly important role in the development of the network.

"For distribution networks, information flows are becoming much more important. In order to connect all decentralized renewable energy sources, the grid itself will have to change its behavior and this will have to happen soon. The network will definitely become smarter, but in order for consumers to participate, they must have smart meters on the one hand. On the other hand - to receive their remuneration for the shift of consumption and for the efforts made, "said the expert.

According to Dilovska, the changes should start with a change in the regulatory approach so as to stimulate investment.

In this regard, the expert gave the example of three important starting points for the President of Ofgem (UK) Jonathan Brearley, who in his presentation of the ten-year network development plan identified three important starting points. First and foremost, the distribution network is at the forefront of reducing emissions. However, in order to reduce them, it is vital that networks receive investment. And third, but not least, the goal is to make the streets green, homes to turn green, households to turn green and buy electric cars.

A new tariff design is needed, Dilovska said. According to her, for the period from 2007 to 2019 so far, network tariffs have decreased by 25%. This is due to the reduction of technological losses in the network.

So far, the losses approved by the regulator for electricity distribution networks are on average 8%. That is, two and a half times less energy is lost (during transmission) compared to 2007. This means that during this whole period for the Bulgarian citizens were saved 30 million MWh of electricity, for which they didn’t pay. For comparison, this is equal to the annual domestic consumption of Bulgaria.

That is, the network has given us a year of free energy.

However, this cannot continue. Such a trend is impossible due to the fact that cheap ways to reduce losses are exhausted. Investments are already needed. Otherwise it will go in the opposite direction. Therefore, a change in the regulatory approach is required. Bulgaria's electricity distribution network needs investment, commented the energy expert from EMI. At the same time, the Climate and Energy Plan does not list specific steps, there is only one page, but with general, theoretical and outdated data and concepts, but no measures to improve the maintenance of the network. For the period 2015 - 2018 the average annual investments were BGN 108 million, and for the period until 2030 the set amount is lower - only BGN 92 million. This, as it became clear from the words of the expert, will be completely insufficient to maintain the network so that it comes out on top in the fight to reduce emissions.