1

Optimization of a Distributed Generator using

IPSA and Net Present Value Calculation
Hassaan Nawabi, Raehveni Nadaraja, Olaoluwa Ogunbayo, Gerallt Hughes, Parth Mehta,
Vignesh Periasamy, Dikgang Pitinyane and Meftah Dagali

Abstract--The effects of connecting a small distributed
generator onto the network including changes in reactive
power and busbar voltages are examined. The tap settings on
the transformers are changed in order to determine the
optimum power output from the generator while meeting
constraints on power factor and busbar voltages. The net
present value is calculated for all values of distributed
generator which satisfy the voltage constraints. The most
economical and efficient solution is found to be a 6MW
generator with the transformer tap setting fixed at -2% which
results in a net present value of £6,468,847.02.
Index Terms – Distributed Generator, Net Present Value,
Optimization Methods.
I. NOMENCLATURE
DG – Distributed Generator
NPV – Net Present Value
HV/MV – High Voltage/Medium Voltage
II. INTRODUCTION
The network was designed in IPSA+ software and the load
flow calculations are simulated with different values of
distributed generation and with different loads.
The load flow was initially run with automatic tap changer
on the transformer to determine a range of possible values
for the DG. The transformer tap settings were then
changed manually to find values that satisfied the
conditions.
The economic factor decides both the combination of tap
changer we are using and the amount of power supplied by
the DG to the system; the NPV method was used to
determine the optimum solution.
III. DESIGN AND METHODOLOGY
A. IPSA
The circuit is based on a real scenario which was
modeled in IPSA software using the network shown in Fig.
1. The parameters of the overhead lines are given in Table

D
istributed generators are penetrating the UK I.
electricity grid. DG employing synchronous
machines (e.g. many CHP schemes and small scale
hydro) can contribute to system voltage control by
supplying the required reactive and real power, balance the
network voltage levels and reduce the stress on the existing DG
network [1]. Fig. 1. IPSA Network Design [4]
Tap-changers on transformers suitably adjust its turn
TABLE I
ratio in order to compensate for the voltage drop due to the OVERHEAD LINES PARAMETERS
real and reactive power flowing through it. Tap changer
control is based on a local measurement of the busbar Calculated
voltage, which is aimed to be kept almost within range of Nominal voltage of Line Impedance
Impedance
the nominal value for a wide range of load variations [2]. circuit (kV) (Ω/km)
(p.u)
The integration of DG into the network can cause 132 j3 j0.86
reduction or reversal of real power flows, and this could 33 0.5 + j1 1.15 + j2.3
lead to changes in the power factor detected by the HV/MV 11 0.5 + j0.25 2.1 + j1.03
transformer. These changes may affect the voltage
regulation provided by the tap changers. A DG is installed as shown in Fig 1. The corresponding
As a result the DG should be coordinated with the tap power factor for the generator can vary between 1 and 0.85
changers to ensure that the distribution network will not be and the DG busbar voltage is maintained within ±10% of
disrupted. The maximum power rating of a DG that can be nominal. All other busbars in the circuit are maintained
integrated into a system is limited by the ratings of the within ±5% of the nominal.
transformers, thermal capacity of the conductors, and the A fluctuating load (factory) is connected to the network
voltage variations allowed at the busbars [3]. with a peak load of 4MW and off-peak load of 1MW. The
For this paper only the maximum voltage variation will load has a corresponding power factor of 0.9(absorbing
be considered as a limiting factor. The voltages on the VArs). The daily profile of the load is shown in Fig 2.
busbars should be maintained within the required limits of
±10% for the DG busbar and ±5% for all others. The power
factor of the DG should be within the range of 0.85-1[4].
 2

where:
X is the constant cost
n is number of years
r is the discount rate as a percentage

The financial parameters used to calculate the NPV of

the project are given in Table III.

TABLE III [4]

FINANCIAL PARAMETERS

Operating cost £0.06 /kWh

Income from sales £0.10 /kWh
Fig 2. Load profile of the factory[4]
Initial cost £1,500 /kW
Discount rate 6%
As shown in Fig 1, there are two parallel 33/11kV Lifetime 10 years
transformers connected to the load side and one 132/33kV
transformer connected to the infinite busbar. The In order to export more power from the DG without
specifications of the transformers are given in Table II. going outside the voltage limits, the tap setting on the
33/11kV transformer could be changed. The cost of making
TABLE II [4] these changes is added to the initial cost of the system.
TRANSFORMER SPECIFICATIONS There are two options that can be considered if this change
is required:
Transformer 132/33kV 33/11kV 1. Making a one-time adjustment of the transformer tap
Minimum tap(%) -10 -10 changing, which will cost £5,000 for labour and
Maximum tap(%) 10 10 planning.[4]
Tap start (%) 0 -4 2. Installation of an automatic tap changer on the
Target voltage (pu) 1.0 1.0 transformer which would cost £100,000. The
Lock tap No Yes transformer would then adjust itself to any value in
the range ±10% with a specified target voltage.[4]
By setting the 33/11kV transformers to on-load tap
changing, the DG value was varied from 3-8MW while
changing the load values in order to find the optimum IV. RESULTS
rating for the DG. The maximum and minimum values for
the reactive power of the DG were set according to the The optimum P and Q rating for the off peak and on peak
power factor range of 0.85 – 1. With these settings, the load was obtained, and the corresponding power factor was
constraints were only met for DG ratings of 3-6MW. calculated. The results are shown in Table IV and it can be
With DG ratings of 3-6MW, the 33/11kV transformers noted that the power factor is maintained within the range
connected to the load were changed to manual tap settings. of 1.0 and 0.85 as required.
The tap setting range was observed and it was noted that 4 TABLE IV
and 5MW would work with the initial tap settings of -4% REAL POWER,P AND REACTIVE POWER Q, AND
while 3 and 6MW would require ranges of -3-0% for the CORRESPONDING POWER FACTOR
constraints to be met.
Tap Setting Load Real Reactive Power
B. Financial Issues Type (MW) power power Factor,
The NPV method is used to determine the financial (MW) (MVar) cos θ
viability of a project by comparing the income obtained Fixed-setting 4 6 -0.686 0.995
from the project against the initial cost. Fixed-setting 1 6 -3.035 0.895
Auto-setting 4 6 -0.752 0.992
If the NPV is > 0 then the project will bring a benefit to
Auto-setting 1 6 -3.72 0.85
the organisation and should be accepted; if more than one
option satisfies this criterion then the highest value of NPV
The voltage values for the load for all 24 hours were
should be taken.
obtained for a DG value of 6MW when in operation or
The present value (PV) of the cash flow in future years
down for maintenance for both a fixed tap setting and an
can be calculated using (1):
on-load tap changer. The results obtained are shown in
Figs.3 and 4. The transformer was changed to an on-load
X (1 + r ) n − 1 tap changer and the results obtained are shown in Figs 5
PV = (1)
and 6.
r (1 + r ) n
 3

Fig 6. On-load tap changer when DG is not connected

Fig 3. Fixed tap setting of -2% when DG is in operation
The results obtained from the IPSA simulations indicate
that a DG between 3 and 6 MW will keep the voltages at
the busbars within the required limits. As a result the NPV
was considered for each of these generator sizes. The
results obtained from the NPV calculations using both the
manual and auto-tap options are shown in Fig. 7.

Fig 4. Fixed tap setting of -2% when DG is not connected

Fig.. 7 NPV Calculations

Based on the results in Fig.7, the best NPV is obtained

for a 6MW DG. Using the manual tap setting gives an
NPV of £6,468,847.02 while installing an auto tap changer
leads to an NPV of £6,373,847.02. These figures mean that
the manual tap is the best option.
The values obtained for the NPV assumption that the
DG operates 24 hours a day for 365 days per year thus
giving the maximum possible values.
In reality however, the DG will require outages for
maintenance and could also be disconnected due to faults.
Both these factors will result in a reduction in income from
power sales.
These calculations do not account for the possibility that
Fig 5. On-load tap changer when DG is in operation maintenance work will be required on the generators over
their lifetime; it is fair to assume that the cost of
maintenance would rise as the number of units increases.
The costs related to both the options relating to the tap
settings on the 33/11kV transformer do not take into
account the cost of disconnecting from the grid to make the
changes.

V. CONCLUSION
From the study conducted, the compromise between
economic and technical considerations leads to the
optimum solution of a DG rating of 6MW with a manual
tap setting -2%. Changing the tap setting from its initial
value of -4% to -2% will allow the maximum size of the
generator to increase from 5MW to 6MW while still
maintaining the voltage constraints. The NPV calculations
showed that the value gained from installing an automatic
tap changer was not sufficient to justify the additional cost
that will be incurred.
VI. REFERENCES
[1] D Borrie, C.S. Ozeren, G.D. Reid and J Hiley, “The
impact of small embedded generation within the UK
electricity market” presented at the Universities Power
Engineering Conference, 2004.
[2] R. Caldon, S Spelta, V Prandoni and R. Turri, “Co-
ordinated voltage regulation in distribution networks
with embedded generation,” presented at the 18th Int.
Conf. on Electricity Distribution, Turin, Italy, 2005.
[3] F.A. Viawan, A, Sannino and J Dallder, “Voltage
control with on-load tap changers in medium voltage
feeders in presence of distributed generation,” Electric
Power Systems Research, vol. 77, pp. 1314-1322, Aug
2007.
[4] J. Ekanayake, EN4705 Assignment, Cardiff University,
Mar. 2010.
VII. BIOGRAPHIES
Hassaan Nawabi was born in Karachi,
Pakistan on June 30, 1986. He
graduated from NED University of
Engineering & Technology, Pakistan
with a BEng Electrical Engineering
Degree in 2008. He worked as an
internee for People Steel Mill Ltd and
Exide Battery Ltd. He worked on a
project “Energy Management” with
Atlas Battery Ltd. He is currently pursuing an MSc in
Electrical Energy Systems at Cardiff University and his
main area of interest is power distribution and micro-
generation.
Raehveni Nadaraja was born in
Kuala-Lumpur, Malaysia on March 31,
1983. She graduated from the
University Tenaga Nasional, Malaysia
with a BEng Electrical & Electronic
Engineering Degree in 2006. Her
employment history included Freescale
Semiconductors and Colgate-
Palmolive. She is currently pursuing MSc in Electrical
Energy System at Cardiff University and has deep interest
in power and energy generation.
4
Olaoluwa Ogunbayo was born in
Nigeria on May 2, 1984. He graduated
from the Concordia University,
Canada with a BEng Electrical
Engineering Degree in 2008. He is
currently pursuing MSc. in Electrical
Energy System at Cardiff University
and has a deep interest in power
system generation and distribution.
Gerallt Hughes was born in Wales on
December 23, 1987. He is currently on
the final year of his MEng. Electrical
& Electronic Engineering degree at
Cardiff University. His current
research work is within the area of
smart metering.
Parth Mehta was born in India on
July 13, 1986. He is currently pursuing
an MEng Electrical & Electronic
Engineering degree at Cardiff
University. He as experience of
working for energy utility companies
and his current education is sponsored
by National Grid. He also organizes
science based educational events for the IET. He is
currently working on a research project looking into smart
metering.
Vignesh Periasamy Nirmala was
born in Chennai on , March 22, 1987.
He graduated from the Anna
University, India with a BEng
Electrical & Electronic Engineering
Degree in 2008. His employment
experience is in GKAR Operations
specializing in UPS. He is currently pursuing MSc. in
Electrical Energy System at Cardiff University and has a
deep interest in wind energy.
Dikgang Pitinyane was born in
Botswana, on June 7, 1967. He holds
Ordinary Technicians Diploma (City
and Guilds of London Institute) which
he achieved at the Botswana
Polytechnic in 1990. He graduated at
the University of Botswana with
B.Eng. Electrical and Electronics
Degree in 2003. He is currently pursuing MSc in Electrical
Energy System at Cardiff University and has keen interest
in earthing systems and energy management systems.