Comprehensive framework for capacitor placement in distribution networks from the perspective of distribution system management in a restructured environment

•New OF from the perspective of distribution network manager is proposed.•Two new terms i.e. cost of reactive power and penalty for voltage drop are added to the common OFs.•To achieve realistic results, several factors are considered.•The proposed OF are applied to three test systems with different sizes and complexities.

This paper presents a new and comprehensive Objective Function (OF) for capacitor placement in distribution networks. In this study, distribution network management’s viewpoint toward identifying comprehensive OF to maximize the benefit of a distribution company is considered. In addition to considering active power loss cost and capacitor cost, two other important terms, i.e. cost of buying reactive power and voltage drop penalty for maximizing the benefit of distribution companies are considered in the OF. All actual conditions including time varying nature of load, annual load growth, time varying price of active and reactive power, and switchable and fixed capacitor are taken into account based on the reality. The profit derived from the proposed OF is compared with two other common OFs, and it is shown that the benefit achieved from the proposed OF is more than the two other OFs. The proposed OF is validated and tested on radial distribution systems with differing topologies and varying sizes and complexities.