Network pricing for smart grids considering customers' diversified contribution to system

Abstract

This paper proposes a modified long-run incremental cost pricing (LRIC) method for distribution network pricing considering the diversified contributions of network users to system peak. The Shapley-value method and modified coincident factor method are used to determine network users' various contributions to the system. The comparison between original LRIC and the modified LRIC indicates the positive correlation between the contribution to system peak and network charges for different network users. This paper also explores the potential users' behavior change to gain bill reductions according to the cooperative-game theory and the consequential network investment deferral.