Energy and Power Engineering, 2013, 5, 384-390 Published Online July 2013 (
The Energy Supply Chain Net
Albana Ilo
Siemens AG Austria, Vienna, Austria
Received May 22, 2013; revised June 23, 2013; accepted July 1, 2013
Copyright © 2013 Albana Ilo. This is an open access article distributed under the Creative Commons Attribution License, which
permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
The integration and the effective use of all available energy resourpces are possible only under a global view of the
power systems. A holistic approach of the power system control, which includes all voltage levels from high to low
voltage and the corresponding commercial model, is represented in the following.
Keywords: Smart Grid; Transmission; Distribution; High Voltage; Medium Voltage; Lo w Voltage; Conservation
Voltage Reduction; Operator Role; TSO; DSO
1. Introduction
Power systems have operated successfully for so long
now in the presence of large generators, transmission and
distribution grid. Recently the strong environmental
movement and the technological advances are just some
of the factors propelling the installation of renewable
energy resources (RES). In those conditions, the efficient
and safe operation of the power systems is not warranted
any more. Consequently, the strategic use and integration
of RES are the hottest and the most challenging topics
nowadays. Power system characteristics, combined with
the manifold behavior of the volatile renewable energy,
make the matter quite complex. There are many research
projects running over own demo regions with very good
results, but that can not be rolled out because of the tight
interdepend ences that do exist in the power systems. As a
result, on one hand, there are many research projects fo-
cused on low voltage in which the medium voltage grid
is also taken into account [1] and, on the other hand,
there are other research projects focused on the transmis-
sion and the medium voltage of the distribution grid
By examining this complexity, it comes out that the
integration and the effectiv e use of all available resources
are possible only under a global view of the power sys-
tems [4]. A holistic approach of the power system control
called “Energy Supply Chain Net”, which includes all
voltage levels from high to low voltage and the corre-
sponding commercial model, is represented in the fol-
2. Definition
An “Energy Supply Chain Net” is a set of automated
power grids, intended for links, which fit into one an-
other to establish a flexible and reliable electrical con-
nection. Each individual link or a link-bundle operates
independently and have contractual arrangements with
other relevant boundary links, link-bundles, and suppliers
which inject directly to their own grid. Under specific
conditions each automated power grid or a couple of
them can split, thus creating a “Microgrid” and vice
3. Power Grid Control Model
Most of the transmission utilities, which operates the
High and very High Voltage Grids (HVG) are intercom-
nected into a gigantic power grid. They operate inde-
pendently fulfilling the existing contractual arrangements.
In emergency cases, each of them can split and operate
isolated. The HVG interconnections create a horizontal
connection axis, while the connection with the corre-
sponding distribution grids creates a vertical one. These
connections are nowadays not flexible at all.
With regard to network operation, the electric power
grid is divided into two parts: transmission (HVG) and
distribution, kno wn as Med ium Vo ltage Grid ( MVG) and
Low Voltage Grid (LVG). Within the power system,
only the HVG is fully monitored, as well as automati-
cally regulated and controlled, with the primary, second-
dary and sometimes tertiary control implemented for
both major quantities of power systems, frequency and
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A. ILO 385
voltage. Figure 1 shows the vertical overview of the
power grid in the past and according to “The Energy
Supply Chain Net” model. Power grid in the past is
shown with its transmission and distribution part. The
primary and secondary control loop of the HVG is repre-
sented with blue lines, while the respective control area
is represented with a blue surface. To facilitate the volt-
age control in the transmission grid, in some cases the
HV/MV transformers are included in the TSO control
area. Unlike transmission network, currently the distr ibu-
tion networks are almost neither automated nor moni-
tored. The monitoring area of the distribution network
operator is shown in Figure 1(a) by a green surface.
Both, power and communication flow normally from
transmission to distribution. Th e power flow in the inter-
section points is shown with red and blue arrows to mark
active and reactive power respectively.
The increasing penetration of RESs in the distribution
network requires a number of steps to move toward
automation. Under the heading “The Energy Supply
Chain Net” a new holistic regulatory approach is shown
in Figure 1(b). The electric power grid is divided into
HVG, MVG and LVG. In the new representation, each of
these elements has the same control scheme. That means
that MVG and LVG are also designed to have primary
and secondary control for both frequency and voltage.
HV/MV and MV/LV transformers are included respect-
tively in the control area of MV and LV grid, because
they have a big impact in keeping the voltage within the
limits in those areas. As shown in Figure 1(b), the pri-
mary objects of regulation in MVG are the distributed
generators, while in LVG the customers facilities. The
power system is conceived as an “Energy Supply Chain
Net” with each grid (HVG/MVG/LVG) being considered
as a link on its own.
(a) (b)
Figure 1. Power grid overview in vertical axis: (a) in the
past; (b) in “The Energy Supply Chain Net” model.
The heart of this model involves the following core
HVG, MVG and LVG are managing themselves, and
react flexible with each other like the links in a chain net.
The MVG represents the central, strategic link-bundle.
That means that each individual link or a link-bundle
member operates independ ently, however they have con-
tractual arrangements with other relevant boundary links
or link-bundles and suppliers which inject directly into
its own grid. The MVG takes over a central, strategic
role because of its position in the middle (it has intersect-
tion points with both HVG and LVG) and only when the
decentralized generators integrated in the MVG reach a
critical mass with a reasonable diversity.
The base of “The Energy Supply Chain Net” model is
the decentralization of different grid parts. Each grid part,
be it HVG, MVG, or LVG, represents a black box for the
others. The links or the so-called black boxes interact in
real time in a flexible way with each other through the
active and reactive pow er flow at corresponding in tersec-
tion points. Figure 2 shows a general overview of the
“Energy Supply Chain Net” model. In the horizon tal axis,
HVG areas are already linked with each other via inter-
connections and build up a somehow flexible connection
with each other. Actually, the flow in the interconnection
is neither automated nor coordinated from the intercom-
nected system level. Instead, the flow schedules are pri-
marily established for economic reasons. In “The Energy
Supply Chain Net” model, the decentralized control is
used to preserve the frequency and voltage quality, as
well as the optimized operation within a certain adminis-
trative area. The control design is subject to constraints
on the generators power, interconnection line flows, and
on the MV/HV and MV/LV transformers for security,
reliability, and economic purposes.
3.1. Voltage Control
Power systems are designed and operated so that the ser-
vice voltages fall within the allowed limits, which are
defined in different international or national standards.
Figure 3 shows the automatic voltage control based on
“The Energy Supply Chain Net” model. The operators of
each grid (HVG, MVG, and LVG) are responsible for
keeping the voltage on the correspond ing grid s within the
allowed limits by using their own reactive power re-
sources, transformer steps and respecting the constraints
on the neighboring intersection points.
“The Energy Supply Chain Net” model has been field
proofed and constitutes the foundation of the industrial
research project called ZUQDE (Zentrale Spannun gs-U&
Blindleistungs-Q Regelung Dezentraler Erzeuger-Cen-
tral Voltage and Reactive Power Control of Decentral-
ized Generators) [5], as shown in Figure 4. The voltage
n the MVG is automatically controlled and at the same i
Copyright © 2013 SciRes. EPE
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Figure 2. General overview of “The Energy Supply Chain Net” model.
Figure 3. Automatic voltage control.
time the operation is being dynamically optimized in
real-time having clear interaction with the HVG. The
object of the primary regulation is the reactive power of
the decentralized generation and the voltage on the low
side of the transformers changed by taps. The secondary
control is realized by the Volt var control (VVC) appli-
cation, which is based on the distribution system state
estimator (DSSE). The reactive flow in the neighboring
intersection point HV/MV is taken into account in the
form of a static cos constraint. Since January 2012, the
MVG has been operating in a closed loop in the region of
Lungau in Salzburg, Austria. Amongst other things, the
exploitation results show that the conservation voltage
reduction can be applied smoothly.
3.2. Microgrid Establishment
Microgrids are regionally limited power systems de-
signed to operate semi-independently, usually operating
by being connected to the macrogrid or being separated
(islanding) from it due to cost effective or other reasons.
As described above, the “Energy Supply Chain Net” is
based on a generic model and easily supports the estab-
lishment of microgrids and their re-connection to the
main system, i.e., the macrogrid. Figure 5 shows the mi-
crogrid establishment process. Figure 5(a) shows the
normal operation in which active and reactive power are
flowing through the intersection points of the grids part
(red and blue arrows show active and reactive power
For example, the process of establishing a microgrid
can begin as soon as the MVG operator has the exigent-
cies to split up and when the necessary resources and the
corresponding contractual agreements are available.
Thanks to the independent control schemas, the active
and reactive power in the intersection points can be con-
trolled up to 0 values. That means that the HVG and
VG are still synchronized, as in Figure 5(b), but no M
A. ILO 387
Figure 4. ZUQDE—project sche me imbe dde d in the “Energy Supply Chain Net” model.
(a) (b) (c)
Figure 5. Establishment of Microgrids: (a) Normal oper- ation; (b) Synchronized; (c) Microgrid.
power is flowing between them. After that, the relevant
CB can be switched off and the microgrid operation is
established as shown in Figure 5(c). The microgrid re-
connection to the main system can be realized as usual
through the opposite way, first the synchronization oc-
curs and than the interchange power starts to flow
through. The same method can be used for every link or
link-bundle of the Chain Net.
4. Power Grid Management Systems
A Management System is a system of computer-added
tools that provides management and control services.
They are used by operators of electric utility to monitor,
control and optimize the performance of the power grid.
Figure 6 shows an overview of power grid management
systems in the past and according to “The Energy Supply
Chain Net” model.
Energy Management Systems (EMS) are the first
management system in the power systems history and
provide advanced management and control services spe-
cialized for HVG. Meanwhile Distribution Management
Systems (DMS) are developed recently due to the in-
Copyright © 2013 SciRes. EPE
creasing requirements on real-time network view and
dynamic decisions and provide advanced management
and control services specialized for MVG, Fi gur e 6( a ) .
LV network is the part of the distribution networks
which has traditionally been characterized as the most
unglamorous one. No any attention was devoted to it and
its elements, and as result no any appropriate manage-
ment system is designed yet. Different manufactures are
trying to solve the increasing requirements to model and
observe LVG with the existing DMS, which are designed
almost for medium voltage grid. But the on going smart
meter roll out process and the photovoltaic penetration
with there specific technical characteristics are bringing
masses of data into play, that can not be managed mean-
ingful with the traditional DMS. Th ose data management
and their use for the on line control and the dynamic op-
timization of LVGs is one of the challenges nowadays. In
those conditions the establishment of a Low Voltage
Management System (LVMS) is necessary and it is fore-
seen in the “The Energy Supply Chain Net” model, Fig-
ure 6(b). A LVMS is a system of computer-added tools
used by operators of electric utility grids to measure,
monitor, control and optimize the performance of the
injections, loads, storing devices and the low voltage
(a) (b)
Figure 6. Overview of power grid management systems: (a)
in the past; (b) in “The Energy Supply Chain Net” model.
5. Communication
The effective and safe management of power systems in
the presence of RES in all voltage levels requires time-
and data-sensitive information exchange.
One of the advantages of the “Energy Supply Chain
Net” model is that the number of the needed data ex-
change to ensure a secure and effective grid operation is
minimized. For example, to keep the voltage within the
limits in real-time in the HVG (transmission) and the
MVG (distribution), only the reactive power, Q, or cos in
intersection points HV/MV should be exchanged. In this
case, a normal European distribution utility should ex-
change the Q or cos value with the TSO in about 500
intersections points (HVG/MVG intersection points).
This amount of data exchange can also be managed with
the existing communication methods.
6. Operator’s Role
The RES percentage in power generation is increased
recently according to the environment and political tar-
gets. The type and the size of the power plants based on
renewable energy resources vary considerably from one
geographic location to another. Depending also on the
environmental, technical, and economical issues, they
can be connected to HVG, MVG or LVG. For example,
there are power systems in which more than 50% of the
total production capacity is dispersed throughout the lo-
cal distribution grids, particularly in the MVG. The
amount of the decentralized RES such as photovoltaics,
which are connected directly to LVG via invertors, is
increasing continuously as well.
In Figure 7 are shown the power grid operation areas
in the past as well as those defined in the “Energy Supply
Chain Net” model. The transmission system operator,
TSO, is actually managing the high and very high grid,
while the distribution system operator is managing the
medium and low voltage grid, as shown in Figure 7(a).
Also in the “Energy Supply Chain Net” model, the
(a) (b)
Figure 7. Power grid operation areas: (a) in th e past; (b) in “The Ene rgy Supply Chain Net” model.
Copyright © 2013 SciRes. EPE
A. ILO 389
TSO will keep the same control area as it is now and will
be further responsible for managing the HVG (including
the very high voltage grid too). Meanwhile, because of
the strategic position described above and the new targets
aimed at facilitating effective and well-functioning retail
markets, the DSO will take over other responsibilities
and restrict the control area only to the MVG. The man-
aging of the LVG in this model is take n over from a new
actor. The need to introduce this actor has already been
stressed in various research projects such as the Bey-
watch [6], Address [7], Fenix [8], etc., which have called
for the necessity of this actor, sometimes named Super-
visor or Aggregator, to be in charge of the interface be-
tween the electricity company and the prosumer portfolio.
Based on “The Energy Supply Chain Net” model, in
which each of the grid parts HVG, MVG, or LVG repre-
sents its own link or link-bund le, this actor is named Low
Voltage System Operator, LVSO, as shown in Figure
7(b). All system operators in the “Energy Supply Chain
Net” model have the same mission to operate, maintain,
and develop an efficient electricity system, and to facili-
tate effective and well-functioning retail markets.
The role of the operators is to act like an orchestra of
three renowned violinists—in our case being the TSO,
DSO, and LVSO, who play in full harmony and grandeur
the world’s most wonderful composition—in our case
operate the electric power system, as shown in Figure 8.
In a perturbation case, the DSO can play an important
role because of his strategic position, which gives him
the possibility to help most effectively in solving the
problem as smoothly as possible.
7. Market Accommodation
As discussed above, one of the missions of each actor is
to facilitate effective and well-functioning retail markets.
The “Energy Supply Chain Net” model accommodates
the presence of different market actors, the TSOs, DSOs,
LVSO, or big/small suppliers and prosumers, and their
respective responsibilities.
Figure 9 shows the accommodation of the different
market actors. In the past, Figure 9(a), the TSO, beside
the technical targets, has also the mission to facilitate
effective and well-functioning retail markets, while the
DSO has actually almost only technical targets.
All energy producers should trade their produ ction into
the market. The trading market is already established for
all large energy producers. While costumer facilities and
Figure 8. Operators’ role.
(a) (b)
Figure 9. Accommodation of the different market actors: (a)
In the past; (b) In “The Energy Supply Chain Net” model.
small distributed energy producers can go into the market
through the well known model of Commercial Virtual
Power Plant (CVPP) which is established in the EU
research project FENIX. Based on the definition of the
“Energy Supply Chain Net” model, not only the TSOs
but also the other operators, DSO and LVSO, have the
mission to facilitate effective and well-functioning retail
markets for all actors who are connected to their own
grids, as shown in Figure 9(b). In addition, they have to
coordinate the operation between each other based on
contractual arrangements at a technical and economical
level. Thus the TSO shou ld establish contractu al arrange-
ments at both levels, technical and economical, with the
DSO. Similarly DSO should establish contractual ar-
rangements with DSO and LVSO at the both levels too.
As a result, DSO is keeping his strategic position also in
the commercial point of view, because he is the only one
having contractual agreement with two operators, TSO
and LVSO.
8. Fazit
The “Energy Supply Chain Net” model therefore ensures
a dynamic system control in RES presence and in a
competitive electric power industry environment.
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