Skip to Main Content
In European member states renewables-based electricity generation (RES-E) and co-generation of electricity and heat (CHP) are eligible for typically technology-specific MS support schemes. This drives the growth of distributed generation (DG) - this are generators connected to the electricity distribution grid - to significant levels. Most member states implemented specific regulation to allocate (part of) grid integration costs caused by distributed generators to operators of distribution networks, i.e. distribution system operators (DSOs) in EU legislation. These costs may be substantial and, if allocated fully to the DG operator, cause an economic barrier to connect to the network. To guarantee non-discriminatory network access charges for DG connections to be paid to the DSO, these should be based on the basis of shallow costs. In contrast to deep cost charging, meaning that DG operators have to bear the costs to reinforce the network, shallow costs are only the direct costs of the connection. Also from the point of view of market access shallow cost charging is to be recommended because DG operators have to compete with large power plant operators.