A dynamic distribution network pricing model

Timely reinforcement of power distribution networks provides secure and reliable system operation for the customers. Network charging mechanisms are required for efficient recovery of the system capital and operational costs. A dynamic model of charging distribution networks is proposed in this paper. The model is based on quantification of bus voltage and power factor variations to reflect the system operation costs in maintaining supply quality, assuring bus voltages to be in limits, which in turn minimizes the system losses. A four-level charging function is formulated for dynamic network charging. The proposed approach is a two tier model in which long-run incremental cost (LRIC) pricing is used to determine the forward looking system reinforcement charges. The combined formulation of dynamic charging provides a balance between long and short term goals of distribution network planning.