Distribution Network Loss Allocations with Distributed Generation using Nodal Prices

J.M. Vignolo (Uruguay) and P.M. Sotkiewicz (USA)


Distribution Networks, Distributed Generation, Loss Allocations


We propose employing nodal factor pricing, a method as sociated with allocating losses at EHV transmission lev els, for the allocation of loss costs at the distribution level. This method differs from traditional methods of averag ing losses across customers regardless of location, time of use, or the marginal contribution of net power injec tion/withdrawal positions to losses. With respect to dis tributed generation (DG) resources, nodal prices provide more efficient price signals for dispatch and siting deci sions. Moreover, nodal prices provide greater economic incentives for the deployment of DG by rewarding DG re sources for contributions toward reducing losses at the mar gin through changed power flows. Nodal pricing factors are calculated using power flows locating "the reference bus" at the power supply point where the transmission network connects to the distribution network. We assume no net work constraints at the distribution level. Finally, we con clude with an application of this method in a rural radial distribution network.

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