Risk-based method for distribution system reliability investment decisions under performance-based regulation
2011 (English)In: IET Generation, Transmission & Distribution, ISSN 1751-8687, Vol. 5, no 10, 1062-1072 p.Article in journal (Refereed) Published
In the reregulated electricity market there is a growing interest in performance-based regulation accompanied by quality regulation for electric distribution networks. This paper develops a new risk-based method for reliability investment decisions when the distribution system operator (DSO) is exposed to financial risks defined by a quality regulation. As quality regulation design becomes more complex, more detailed risk management methods are needed in order to adequately capture the financial risk the DSO is exposed to. The proposed method applies a Monte Carlo simulation technique in order to assess the risks of the considered reinvestment projects. By using the proposed method the impacts that different risk strategies (risk-neutral/risk-averse) and risk models (non-time-varying/time-varying) have on which reinvestment project is selected is investigated in a case study. This is investigated for two different quality regulation designs. The result show that primarily the quality regulation design but also the risk model formulation and risk strategy have a major impact on which reinvestment project is selected.
Place, publisher, year, edition, pages
2011. Vol. 5, no 10, 1062-1072 p.
risk based method, distribution system reliability, investment decisions, performance based regulation, re-regulated electricity market, quality regulation, electric distribution networks, distribution system operator, financial risks, risk management method, DSO, Monte Carlo simulation
Other Electrical Engineering, Electronic Engineering, Information Engineering
IdentifiersURN: urn:nbn:se:kth:diva-33813DOI: 10.1049/iet-gtd.2011.0047ISI: 000295534100009ScopusID: 2-s2.0-80053515792OAI: oai:DiVA.org:kth-33813DiVA: diva2:417907