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Title: Framework for allocation of transmission and distribution network costs
Author: Mutale, Joseph
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 1999
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Electricity Supply Industries world-wide are undergoing major structural changes with the fundamental objective of introducing competition and choice in electricity supply in the belief that this will lead to lower electricity prices and improved quality of service. A key feature of the emerging industry structure is the separation of the generation, transmission, distribution and retail (supply) segments of the electric energy business into autonomous business units. Prices in the generation and supply segments are determined through suitable market mechanisms, whereas those in the monopoly segments of transmission and distribution are regulated. Interaction between all these business units is through commercial contracts. An essential condition for competition to develop is open access, on a non-discriminatory basis, to transmission and distribution networks by all players in the energy market. Pricing of transmission and distribution networks is the central issue in the concept of open access. This research summarises the main problems faced by present network pricing arrangements in a deregulated environment and presents a framework for the development of a more equitable pricing concept which seeks to satisfy the principal objectives of economic efficiency, revenue generation as well as transparent and stable prices. The proposed framework is based on the concept of the reference network (also known as the economically adapted network). In the proposed approach the network pricing problem is treated as a two-stage process comprising determination of allowable costs (and hence revenue) based on the reference network followed by allocation of these costs to users of the network in a cost reflective manner using marginal cost pricing principles. Due to differences in network characteristics, investment and operating cost drivers are different in transmission and distribution systems requiring different approaches to network pricing in the two systems. To determine optimal transmission prices, a multi-period model is developed for determining optimal transmission capacity by minimising total annual generator operating and annuitised transmission investment costs subject to deterministic network security constraints, Kirchhofrs current and voltage laws, line thermal and generator output limits. The model employs the DC formulation of the power flow problem and applies Ben~ers decomposition to solve the resulting very large-scale optimisation problem. Optimal time-of-use location-specific transmission network tariffs are derived and their practical application demonstrated on the IEEE 24-bus Reliability Test System. Three methods for allocating losses in transmission and distribution systems are developed. Particular emphasis is placed on economic efficiency and equitable treatment of players in the energy market place, especially the promotion of fair competition between central and dispersed generation. A framework is established for development of loss-driven network use-of-system charges for distribution networks with dispersed generation. Application of the proposed. distribution use-of-system charges is demonstrated on a 281-node generic distribution system model. A conceptual model is developed for determining optimal performance driven investment and operating costs by balancing these costs with customer outage costs. The direction for future research in the area of network pricing is identified to be the development of methods and techniques ~o support the concept of reference network business in which customer driven quality of service requirements will be the main issue.
Supervisor: Strbac, Goran Sponsor: Commonwealth Scholarship Commission
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available