Energy-based distributed generation incentives for distribution network operators

The presence of distributed generation in the electricity distribution system has a significant impact on the performance of the network in terms of reducing power losses, network investment and carbon emissions. The active role of all the associated parties, such as distributed generation investors, electricity retailers and distribution network operators is very important to increase the penetration of distributed generation. One of the methods to encourage the participation of those parties is by giving financial incentives. This paper proposes a mechanism to give some incentives for the distribution network operators based on the actual energy conveyed from the connected distributed generators, rather than based on the connected capacity of the distributed generation, as applied in the current incentive mechanism. A reference network with some generation-dominated busbars is used to examine the power flow and the actual energy conveyed from a new distributed generation connection. The analysis includes different types of distributed generation technologies. The results show that the type of distributed generation technology will determine the amount of energy conveyed through the network, which in turn, will affect the value of incentives for the distribution network operators.