The economical modelling of a distribution system for electricity supply chain

We propose an integrated distribution system model for electricity supply chain. The distribution system consists of a power plant, a transmission substation, a distribution substation and multi-customers. The electricity generated by the power plant is transmitted to the submission and distribution substations, and finally consumed by the customers. We apply the inventory theory to the distribution system model and assume the electricity demand is normally distributed. The objective is to minimize the joint total expected cost (JTEC) incurred by the power plant, transmission substation, distribution substation and multi-customers. The JTEC includes the transmission and the distribution costs, the blackout cost, the energy storage cost, setup/ordering cost, and the production cost. We develop a procedure to derive the optimal solution and the decision variables using differential calculus. The model is tested with an artificially generated data. The results in Fig. 5 show that as JTEC increases, the parameters of the average and standard deviation of electricity demand, power supply rate, length of lead time, capacities of power plant and transmission substation increase. The cost decreases as the blackout ratio and distribution substation capacity increase. The cost is insensitive to the changing electricity consumption time.

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