A New Method of Distribution Marginal Price Calculation in Distribution Networks by Considering the Effect of Distributed Generations Location on Network Loss

Abstract

The determination of practical and coherent policy to pin down the price in restructured distribution networks should be considered as a momentous topic. The present paper introduces a new method of distribution marginal price (DMP) calculation. The main aim of this paper is to evaluate the DMP for both producers and consumers separately. For this purpose, the first part of the procedure emphasizes a price by which the producers should sell their power. To meet this target, the share of each node plays a significant role in the total active loss of the network. The producers will make a substantial profit when their efficiency leads to decreasing the share of the node that is associated with the total loss. In the second part of the procedure, DMP is computed for the consumers. In this part, based on the distribution system operator’s decision about the obtained profit allocated to the consumers, their payment has been reduced. This method has been applied to the 33-Bus Distribution System. The results demonstrate the characteristic of the method which tends to encourage the distributed units to increase their output powers. This is the reason why the penetration of these units in the networks is an opportunity for consumers from an economic aspect in such a way that merchandising surplus (MS) becomes zero.