EET-652: ELECTRIC POWER PROJECT EVALUATION AND PRICING

Dr. Satish Sharma

Department of Electrical Engineering

Malaviya National Institute of Technology Jaipur
 Separate pricing for transmission and distribution

networks
 Distribution Reinforcement Model

 University of Manchester Institute of Science and

Technology Model
 Investment Cost Related Pricing Model

 Long Run Incremental Cost Pricing Model

 Hypothetical, Independent Network, Designed As
Extension To Existing System
 Identifies Cost Of Providing Network At Each Voltage
 Cost Allocation To Customer Groups
 Prices Vary with Voltage Of Connection & Not Location
 Charges Reflect Cost Of Existing Assets Value
 Does Not Account Time Of Use, Issues Of DG’s (Reverse
Power Flow)
 • Simple to Implement
Pros
• Charges for demand only

DRM

• No locational signal
Cons • Can’t derive charges for generation
• No cost-reflective
 Symmetrical Area Differentiated Approach To Estimate Long Run
Unit Distribution Costs Of Demand & DG
 Recognizes Interaction Between Generation And Demand
 Identify Critical Flows
 G And D Pays/Paid Based On Contribution To Critical Flows
  Reflects Cost Of Meeting Of Demand or Generation At Each Node
On Reference Network
 Cost Derived By Applying A Standard Cost For Network To Power
Flow Distance To Meet Demand Increment
 Marginal Cost Obtained For Generation & Demand Are Equal &
Opposite
 Does Not Recognise Degree Of Assets Loading

 Assumes Fully Utilised Existing Network For Existing Customers &

Additional Demand Requires Immediate Reinforcements

 Considers Distance And Degree Of Utilization
 Unsymmetrical Charges For Generation And Demand
 Impact Of Positive, Negative, And Zero Growth Rate
 Prices Vary With Voltage And Geographic Location
 Data:
Line Capacity= 45 MW
Load Growth Rate= 1.6 %
25000
Line Cost= 236760 Rs/yr
Network Charges Rs/MW/Yr

20000

15000

ICRP Charges
10000
LRIC charges

D +1MW
5000

0
10 20 30 40 50 60 70 80 90 100

% Utilisation
 Users Access to Distribution Network Differently
 Coincidence of Similar End Uses
 Contributes Early Reinforcement
 Long Run Incremental Cost Pricing Model – Does not consider
User’s Contribution to Network Peak
 Diversity factor- evaluate network demand
 Electricity Charges – customer classification
 Customer class contribution to network peak demand
 Contribution Factor
 Differential Price signal
 Location specific signal to users
 Customer class specific LRIC pricing model
 Different load growth rate for customer classes
 Customer class specific signal
 Contribution to upstream asset usage
 Class contributions to total load at any node
 Annualized incremental cost of component
 Environmental concerns- low carbon economy
 Increasing penetration of Renewable generation
 Uncertain generation
 Gen. offered Uniform prices
 Congestion
 Demand Flexibility
 Remodeling of LRIC pricing model
 Demand flexibility is utilized to reduce network burden
 Customers class specific signal
 Contribution to upstream asset usage
 Class contributions to total load at any node
 Time differentiated signal
 Price elasticities
 Modified profile
 Investment Deferral – annuitized present value of
Future Investment
 For any queries, feel free to call me or contact
on Whatsapp or Google classroom.