Distributed generation location based on fuel cost minimization in deregulated electricity markets

Abstract

Distributed generation will play a key role in the future electricity markets with its increasing share of energy and improving voltage profile, reducing losses, reducing fuel cost and increasing efficiency of electricity market operation. This paper presents an optimization approach for determining optimal location of distributed generators in deregulated electricity market based on fuel cost minimization. The fuel cost has been obtained connecting distributed generator at each bus iteratively and pattern of fuel cost have been obtained. The distributed generator has been located at a load bus with minimum fuel cost. The patterns of real and reactive nodal price, losses, and line flows have been obtained without and with the presence of distributed generator for pool electricity market model. The proposed optimization approach has been applied for IEEE 24 bus reliability test system.