Regulatory incentive mechanisms for promoting investments in Smart Distribution System

This paper focuses on the guidelines of the Italian Energy Regulator (AEEGSI) for large scale investments on innovative systems for electricity distribution (Smart Distribution System). The analysis undertaken leads to the identification of two innovative functionalities that are not promoted by existing incentive regulatory mechanisms, and could be developed even without challenging telecommunication systems. The paper is also focused on the incentive mechanism introduced by AEEGSI in order to stimulate DSO to deploy innovative functionalities where these are mostly needed (areas with huge RES penetration). Without such an incentive, the DSO could have no interest in developing innovative solutions, and the system benefits could be missed.