Value based pricing of distribution generations active power in distribution networks

Seyyed Majid Miri Larimi, Mahmoudeza R. Haghifam*, Mansoureh Zangiabadi, Philip Taylor

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

12 Citations (Scopus)


With widespread installation of distribution generations (DG) mainly in distribution networks, a fairly incentive scheme is required to better meet the investment and innovation challenge and to drive the innovation needed to deliver a sustainable energy network with value for money to existing and future consumers. This study proposes a new method to determine DG energy price based on its impact on active loss reduction. This method calculates the actual value of each DG in the active loss reduction and according to this value, determines DG energy price, which is named value based pricing. The proposed approach is applied to a market model with two different agents, namely considered as the distribution company (DisCo) and the owner of DG. In this model, the DisCo is considered as the sole owner and operator of a distribution network and can purchase energy from the wholesale electricity market and/or from DG units owned by independent producers. To illustrate the advantages of the proposed method compared with the local marginal pricing(, both methods are implemented in 33-bus distribution network.

Original languageEnglish
Pages (from-to)2117-2125
Number of pages9
JournalIET Generation, Transmission and Distribution
Issue number15
Publication statusPublished - 19 Nov 2015

Bibliographical note

Publisher Copyright:
© 2015. The Institution of Engineering and Technology.

Copyright 2015 Elsevier B.V., All rights reserved.


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