Integration of distribution and generation: A lever to improve the system efficiency with a proposal of regulatory changes

In this paper the economic viability of medium-size open cycle gas plants is analyzed in the context of the Spanish electricity market, as well as their potential to solve distribution reliability problems and to increase the maximum level of wind power installed. The conclusions are that, with the current technology, cost and prices, the medium-size open cycle gas plants are not viable for a private investor, in spite of their total contribution to the global welfare being high. For this reason, it makes sense to design a system of subsidies or public helps to assure the correct development of this kind of power plants.