A New Approach to Determine a Distribution Network Usage Fee for Distributed Generators

Abstract

This paper proposes a new approach to determine a distribution network usage fee (DUF) for distributed generators. The methodology is based on distribution of costs associated with use of the distribution network, among all system users, including those with or without distributed generation (DG). To estimate the distribution network costs, impact of DG on the distribution network is valued. In order to achieve a fair and equitable electricity tariff, this methodology considers DUF calculation on the following DG variables: type (photovoltaic or wind), location, and size. Uncertainty associated with system demand and energy resources is probabilistically modeled through their cumulative probability functions. The proposed method is tested on a 33-node distribution system, under scenarios of variable location and capacity of the DG system. Furthermore, internal rate of return is calculated to evaluate DUF application on DG projects.