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Report RSE 17000234

Development of a methodology for the scocio - economic Multi - Criteria Cost Benefit Analysis "MC - CBA" of Smart Grid

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2016

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F. Pilo (Università degli Studi di Cagliari), G. Celli (Università degli Studi di Cagliari), M. Troncia (Università degli Studi di Cagliari), I. Gianinoni (RSE SpA)

SMART-DSYS 2016 - Development and management of distribution networks

This report describes the development of a new methodology, which combines the advantages of the Cost Benefit Analysis (“CBA”) with the ones of the Multi – Criteria Analysis (“MCA”), for the evaluation of social and environmental benefits of smart grid applications. The activity is also carried out in the frame of the Italian participation in the international ISGAN initiative and in particular in the key project called “Annex 3: Benefit - Cost Analyses and toolkits”.

The main objective of this report is the development of a new methodology that combines the advantages of the Cost/Benefit Analysis (CBA) with the ones of the Multi-Criteria Analysis (“MCA”) for the evaluation of non-monetary social and environmental benefits of smart grid applications, with the aim of satisfying both regulatory bodies and stakeholders of the projects. The activities described are also carried out in the frame of the Italian participation in the international ISGAN initiative (International Smart Grid Action Network), and in particular in the animation of the key project called “Annex 3: Benefit - Cost Analyses and toolkits”.

The in-depth study of the two methodologies has shown that the MCA analysis is more suited to facing decision issues in which the social and environmental aspects can neither be neglected nor valued in monetary terms without forcing the methodology. The CBA analysis can represent an input for a more general MCA; the combined use of the two methodologies enables a more in-depth analysis of priorities and impacts. In the development of the combined methodology it has been considered important to refer it to the international guidelines for the evaluation of smart grid projects – in particular of the European Joint Research Center (JRC) – thus increasing the soundness of the approach. The scientific novelty is in the procedure formalisation.

The proposed methodology breaks down the evaluation process into a hierarchy of criteria, which are specific, qualitatively or quantitatively measurable objectives. A system of relative weights and indicators allows to build up a performance matrix that is able to associate to each benefit/impact the corresponding indicator value. The methodology must be repeated for all project options under analysis to complete the matrix, which therefore summarizes the performance of all project options against all evaluation criteria. The comparison between the project options is based on this performance. At this point it is possible to apply a mathematical technique of multi-criteria analysis that is able to indicate the best option of the set, in reference to the general objective of the hierarchical structure.

The application of some mathematical techniques to the CBA MCA analysis will be carried out in the next phase of activity to assess the various options for the deployment of the latest generation of smart meters in Italy.

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