Demand response‐based enhanced LRIC pricing framework

Abstract

Increasing penetration of intermittent renewable generators (RGs) results in variable generation. This is likely to create congestion of varying quantum and temporal distribution in distribution networks. The existing distribution network charging methodologies like long-run incremental cost (LRIC) offer location-specific signal to users and charge customers reflecting their use of system. These methodologies can be modified using contribution factor to reflect users demand coincident with peak network demand. RGs are encouraged by relieving them from such contribution-based pricing signals. Congestion caused by intermittent RG could be mitigated by utilising demand customers' flexibility. This study incorporates short-term demand-side response (DSR) signal for demand customers to manage variability caused by RG in the modified LRIC pricing model. These short-term DSR signals in the form of peak/off-peak charge offers, in conjunction with demand elasticity, helps to assess customer response. This result in modified load profile for various class customers connected at the nodes, which is used for evaluating network charges. The proposed approach is applied to a practical Indian reference network with consideration of distributed generation. Results from modified LRIC pricing model encourage users to change their short-term consumption and help network owner to alleviate congestion and minimise network investment.