On the Quantification of the Network Capacity Deferral Value of Distributed Generation

This paper presents an approach to the quantification of the distribution network capacity deferral value of distributed generation (DG). Besides different technical benefits such as reliability and power quality improvement, there are a number of economic benefits related to DG, the most important of which being the end-user electricity bill reduction capability. However, since the onset of the implementation of these technologies, the potential of DG to defer investments on distribution wires and transformers was soon realized, to the point that "non-wire solutions" are now considered as an alternative to network upgrades. In this work, a first approximation to the capacity deferral benefits brought about by DG is obtained. Such approach can be the starting point towards the development of a framework of credits to the owners of DG that fully and fairly recognize the deferral benefits provided to the utility. The financial performance of investments on these important technologies can be then improved, thus broadening DG as a viable market alternative for customers and utilities