Transmission Pricing for Distributed Generation Transactions Based on Cost and Benefit Analysis

Fast development of distributed generation alters the electricity transactions and shift the interests of stakeholders in power industry. Transmission pricing for distributed generation transactions is one of many policy tools that can balance the interests among the grid companies, the electricity customers, and the distributed generation suppliers. This paper discusses the costs and benefits of distributed generation from the perspectives of stakeholders, proposes a process to quantify the costs and benefits of distributed generation from the perspective of grid companies in four business aspects: system demand, system operation, grid inspection and maintenance, and grid construction. An optimization model for transmission pricing of distributed generation transactions is proposed to minimize the interests shifting between the grid company and the end users. The proposed method is applied to an actual provincial region. The case study demonstrates that the proposed optimization model is applicable and justified.