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Value based pricing of distribution generations active power in distribution networks

Lookup NU author(s): Dr Mansoureh Zangiabadi, Professor Phil Taylor


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With widespread installation of distribution generations (DG) mainly in distribution networks, a fairly incentive scheme is required to better meet the investment and innovation challenge and to drive the innovation needed to deliver a sustainable energy network with value for money to existing and future consumers. This study proposes a new method to determine DG energy price based on its impact on active loss reduction. This method calculates the actual value of each DG in the active loss reduction and according to this value, determines DG energy price, which is named value based pricing. The proposed approach is applied to a market model with two different agents, namely considered as the distribution company (DisCo) and the owner of DG. In this model, the DisCo is considered as the sole owner and operator of a distribution network and can purchase energy from the wholesale electricity market and/or from DG units owned by independent producers. To illustrate the advantages of the proposed method compared with the local marginal pricing(, both methods are implemented in 33-bus distribution network.

Publication metadata

Author(s): Larimi SMM, Haghifam MR, Zangiabadi M, Taylor P

Publication type: Article

Publication status: Published

Journal: IET Generation, Transmission and Distribution

Year: 2015

Volume: 9

Issue: 15

Pages: 2117-2125

Online publication date: 19/11/2015

Acceptance date: 24/06/2015

ISSN (print): 1751-8687

ISSN (electronic): 1751-8695

Publisher: The Institution of Engineering and Technology


DOI: 10.1049/iet-gtd.2014.1162


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