Characterization of the loss allocation techniques for radial systems with distributed generation

In the restructured electricity industry, meaningful loss allocation methods are required in order to send correct signals to the market taking into account the location and characteristics of loads and generations, including the local sources forming the distributed generation (DG). This paper addresses the issues related to loss allocation in radial distribution systems with DG, with a three-fold focus. First, the key differences in the formulation of the loss allocation problem for radial distribution systems with respect to transmission systems are discussed, specifying the modeling and computational issues concerning the treatment of the slack node in radial distribution systems. Then, the characteristics of derivative-based and circuit-based loss allocation techniques are presented and compared, illustrating the arrangements used for adapting the various techniques to be applied to radial distribution systems with DG. Finally, the effects of introducing voltage-controllable local generation on the calculation of the loss allocation coefficients are discussed, proposing the adoption of a “reduced” representation of the system capable of taking into proper account the characteristics of the nodes containing voltage-controllable DG units. Numerical results are provided to show the time evolution of the loss allocation coefficients for distribution systems with variable load and local generation patterns.