Evaluation of economic regulation in distribution systems with distributed generation

The economic regulation impact on distribution system investment is evaluated by a network expansion planning model in this paper. Distributed generation (DG) integration has been taken into consideration in network investment worldwide. In most studies DG units are planned by distribution system operators (DSOs). However, in some countries DSOs are not allowed to own generation due to unbundling regulation. In the proposed model formulation, DG units are not owned by the DSOs. Moreover, fluctuation from load and DG in the planning periods, DG curtailment possibility and regulation on losses and DG connection fees are altogether considered. Different regulation arrangements are studied in the same testing network and the resulting network expansion costs are compared. The main value of this paper lies in the application of network planning model to the economic regulation analysis, in the quantification of the impact of different economic regulation frameworks, and in the implications of different regulation choices concerning distributed generation integration.