New Price Area Zonal-based Approach for Optimal Location of Distributed Generation in Hybrid Electricity Markets

Abstract This article presents a new price-area-based zonal approach for the optimal location of distributed generation in pool, as well as hybrid electricity, markets. The price-based zones have been determined based on the nodal price of real power obtained at each node. The price-based zone has been determined based on the variation and magnitude of the real power nodal price at each node. The zone with a higher variation of the nodal real power price has been termed as zone 1, and that with a low variation of price has been termed as zone 2. Two new benefit indices, based on nodal price reduction and fuel cost savings, have been proposed and determined based on the location of distributed generations at load buses in the higher nodal price zone. The study has been performed for pool, as well as hybrid electricity, markets. The proposed optimal power flow based approach has been tested on an IEEE 24-bus reliability test system.

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