Framework for determining the compensation price for output curtailment of distributed generation within active distribution network management

Within active distribution network management, distributed generations, which are contracted by the non-firm connection method, can be directly controlled by the distribution network operator to adjust their power factor and the active power output level. This is called an output curtailment of distributed generation. Although the purpose of the output curtailment is to stably operate the distribution network, it inevitably limits the revenue of distributed generations. Therefore, the need for suitable compensation to the output curtailment is often discussed. As an extension to the discussion, this study proposes the method to determine the suitable bounds of the compensation price for output curtailment. In the proposed method, the suitable bounds of compensation price are obtained from the profit analysis of stakeholders in accordance with the level of the compensation price through optimal power flow technique.