Integrating consumers’ supply valuation and flexibility in distribution network planning and charging

The current distribution network operation and planning framework is rather centralised. The distribution network operator (DNO) makes decisions on congestion management and network upgrades without communicating with the consumers and taking into account their actual valuation of electricity supply and flexibility. Customers’ valuation, reflecting their willingness to curtail or reschedule their loads, is based on their requirements, preferences and perceptions regarding energy use. This value is currently assumed identical 1) for all consumers of the same type (i.e., residential, commercial and industrial) and 2) for every unit of energy supplied, irrespective of the specific service it provides to the consumer. Furthermore, specific operations of time-coupling technologies, such as electric vehicles and wet appliances, are not integrated in the current framework. Therefore, their valuation of supply is disregarded in distribution network planning. The time-coupling technologies provide the opportunity for DNOs to redistribute the energy over the time instead of reducing the demand. Finally, the current distribution network charging schemes are based on the overall customers’ energy consumption or capacity and not the differentiated impacts of individual user preferences. Hence, they do not accurately reflect the contribution of each customer to the total network expenditure. Building on the advanced metering and control capabilities of the emerging smart grid, this work explores the impact of integrating the differentiated valuation of electricity supply for different customers and different levels of supplied energy in distribution network planning. To quantify customers’ valuation, their flexibilities are modelled based on their willingness to curtail and reschedule their loads to avoid additional network charges. Customer interruption costs are then reduced, since the supply interruption of customers with low supply valuation and the non-critical part of their demand is prioritised during network failures. As a result, the need for capital-intensive network reinforcements is limited and the total network expenditure is reduced. Finally, a cost-reflective network charging scheme based on the principles of locational marginal pricing is proposed. This scheme enables an equitable treatment of customers with differentiated supply valuation as well as full recovery of investment costs for DNOs.Open Acces