Optimal distributed generation placement in the LMP based electricity market | |
| Author | Gautam, Durga |
| Call Number | AIT Thesis no.ET-05-20 |
| Subject(s) | Distributed generation of electric power Electricity--Marketing |
| Note | A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Environment, Resources and Development |
| Publisher | Asian Institute of Technology |
| Abstract | With the introduction of competitive electricity market, price has become a matter of prime concern among the market participants. There has been a consequent increase in number and volume of power transactions in generation and retail sector. The transmission system, on the other hand, due to large economies of scale, is still recognized as a natural monopoly. These aspects, coupled with shrinking generation economies of scale brought about by advanced design technologies and concerns about environment, have put distributed generation (DG) at the forefront of energy destiny. In order to achieve the maximum benefit from DG, optimal allocation is necessary. Aiming at achieving optimal placement and sizing of DG in optimal power flow (OPF) based wholesale electricity market, the problem for the present study is formulated with two distinct objectives, namely social welfare maximization and profit maximization - the latter intended at maximum profit for DG owner. Specific grid locations are examined to study the influence of DG on overall social welfare and profit. The candidate locations are identified on the basis of locational marginal price (LMP) which gives the short run marginal cost (SRMC) of electricity. Obtained as lagrangian multipliers associated with the active power flow equations for each of the nodes in the system, LMP bridges engineering aspect of system operation and economic aspect of market operation and thus acts as a good indicator of DG placement in a market scenario. Consumer payment, evaluated as a product of LMP and load for each load bus, is proposed as another ranking to identify candidate nodes for DG placement. The placement is carried out as per the rankings and the effects under various scenarios are studied in detail. The underlying concepts are tested in six bus test system and modified IEEE 14 bus test system. DG placed at a node is found to reduce the LMP at that node. Moreover, it has affected the overall dispatch pattern resulting in reduced total losses in the system. The consequential increase in social welfare and alternatively, the profit, however, is obtained for optimal location and size of DG. In order to provide a scenario of variety of DGs available in the market, several cost characteristics are assumed. The placement as well as penetration is found to vary with the cost characteristics of DG. For each characteristic, there is an optimal placement and size of DG for which the net social welfare and, alternatively, the profit is maximized. The DG with low incremental cost compared to central generation is found to have higher penetration in the system ultimately favoring the node with high consumer payment. On the other hand, DG with higher incremental cost and accordingly the lower penetration is found to follow the ranking made on the basis of LMP. The analysis made for the DG capable of injecting reactive power revealed that social welfare is maximized only for a certain value of real and reactive power dispatch and accordingly there is only one power factor of DG for which the net social welfare is maximized |
| Year | 2005 |
| Type | Thesis |
| School | School of Environment, Resources, and Development (SERD) |
| Department | Department of Energy and Climate Change (Former title: Department of Energy, Environment, and Climate Change (DEECC)) |
| Academic Program/FoS | Energy Technology (ET) |
| Chairperson(s) | Nadarajah, Mithulananthan |
| Examination Committee(s) | Shrestha, Ram M.;Surapong Chirarattananon;Weerakom Ongsakul |
| Scholarship Donor(s) | Government of Norway (NORAD) |
| Degree | Thesis (M.Eng.) - Asian Institute of Technology, 2005 |