Effect of load models on nodal pricing and revenue evaluation of DG in distribution network

Abstract

Connecting distributed generation (DG) in distribution network are becoming gradually popular, and this trend has changed the characteristics of distribution network from passive to active. In the present scenario, it is relevant to consider some similar pricing mechanism in distribution as transmission, such as nodal pricing, that gives a short term marginal cost of electricity as product of nodal price and load at each load bus. In order to maximize the revenue of DG as a reward for voltage improvement, and, reducing line losses and line loading, it should be placed at a node with highest nodal price. There had been studies to place the distributed generations with different objective function assuming the load as constant. However, the loads are sensitive to voltage and frequency. Accordingly, in this study voltage dependent model of loads have been included while determining the node with highest nodal price for locating DG to obtain maximum revenue. It will be shown that DG may obtain more revenue under nodal price for its contribution towards voltage improvement, reducing losses and improving line loading. The proposed strategy is applied to power distribution systems, and its effectiveness is verified through simulation results on a rural radial distribution system under time varying loading conditions.