Advanced Distribution Use of Network Pricing Method for Equitable Cost Allocation in Distributed Energy Resources Integrated Power Systems

Distribution Use of Network (DUoN) charges are crucial for recovering the costs of installing, operating, and maintaining the distribution network (DN) assets. This article presents a pricing algorithm to charge consumers and distributed energy resources (DERs) based on their impact on the distribution network. This method utilizes a sensitivity approach to calculate the deviation in system annual chargeable cost based on the incremental change in a) the real and reactive power flow of the facilities, b) the MW-Miles and MVAr-Miles flow of the system, and c) the power factor of the system. This reflects the combined effect of all these parameters and either charges or incentivizes the consumers based on the amount of real and reactive power they are consuming, the distance used to support customers’ real and reactive power injection/withdrawal, the capacity of DN assets being utilized while power is being delivered to consumers and influence on system power factor.The main advantage of the proposed approach is that it is not dependent on the tracing algorithm to detect the power flow paths, hence capable of computing DUoN for decent-sized DNs embedded with DERs, where the contribution of power to the consumers by the DERs or from the grid is difficult to determine or trace. Additionally, due to the appraising and penalizing characteristics of the proposed DUoN charging mechanism, the proposed pricing algorithm may encourage users to act based on local economic signals. This algorithm has been tested on a modified Western network, the IEEE-15 bus network, the IEEE-69 bus network, and the IEEE-123 bus network.