Abstract
Industry practitioners who advocate retail competition and Demand-side Participation now look for approaches to link both initiatives through distributor pricing. As distributors incrementally convert more traditional assets into Smart Grid assets, they also need to consider different pricing appro
Highlights
Several industry initiatives have been taking place in the deregulated electricity markets around the world including the New Zealand Electricity Market
The long run average incremental cost (LRAIC) pricing methodology [5] differs from long run incremental cost (LRIC) slightly, which does not strictly allocate the incremental fixed asset costs to the particular customers who cause the network congestion, so it is less complex to understand and less costly to implement in practice
Distributor pricing approaches enabled in Smart Grid to di erentiate delivery service quality reward or penalties for service disruption payments can be estimated by reliability index probability distributions [11]
Summary
Trend of retail competition and Demandside Participation continues, which has seen the demand dispatch (DD) scheme being implemented. In this full locational marginal price (LMP) based market without the capacity market structure, the system operator publishes the price-responsive schedule (PRS) and the non-responsive schedule (NRS) to inform stakeholders about how price-responsive bids affect the schedules. This paper firstly reviews the distributor pricing approaches for both network and non-network based solutions, and the pricing approaches involving system reliability indices in distribution networks It describes the formulations of distributor pricing approaches enabled by Smart Grid development, with a focus on LRAIC, controllable loads and load point reliability indices. Service quality differentiation is a viable option to enable small customers to participate in wholesale market through enabling controllable loads
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