Revenue-Based Allocation of Electricity Network Charges for Future Distribution Networks

This paper investigates the economic implications that high penetrations of distributed energy resources (DER) have in future distribution networks, and proposes a novel scalable scheme for the assignment of use of network charges based on individual participant nodes’ revenue. For validation purposes, a techno-economic simulation is proposed to understand how power and revenue flows will change. A year-long high-resolution quasi-static time series (QSTS) simulation, two price schemes, four trading environments, and four DER allocation methods from the literature are used to study economic benefits for individual participants and the supplier. Testing is performed using the IEEE 33-bus and 123-bus networks, and an Irish urban medium voltage feeder. Revenue flow is presented as an indicator of which participant nodes are profiting more from grid usage, and therefore should be responsible for greater network charges, this is validated against traditional and alternative schemes. Important reductions in use of network charges are seen especially by participant nodes with a higher PV generation-to-load and self-consumption rates. The proposed method is only relevant when dynamic tariffs are in place and/or local trading is enabled. Ultimately, results suggest that the income from network charges received by the supplier is increased when dynamic tariffs are used.