Economic analysis of private investor participation in long-term distribution network planning

Abstract

Recently, distribution network planners have enacted some facilities and policies to utilize the potential of private investor participation. Network planners should propose an attractive scheme to persuade the investor to take part in the long-term planning. In this paper, a distribution network planning approach with the cooperation of the private investor is proposed. In the proposed approach, the network planner optimizes the battery energy storage systems (BESS) installed by the investor to satisfactorily shave the peak load of the system. Through this optimization, the planner provides a financial resource to support the investor during the planning horizon. The benefits of both participants are considered and evaluated through economic indices such as payback period years (PPY), profit investment ratio (PIR), internal rate of return (IRR), and net present value (NPV). Due to the presence of photovoltaic (PV) in the system, and the inherent intermittency of load, a K-means data clustering algorithm is employed to catch the uncertainty of the problem. The obtained mixed-integer nonlinear model is solved via particle swarm optimization (PSO) and the proposed approach is tested and implemented on a 16-bus distribution test system. A sensitivity analysis on the incentive price and investment cost is also performed. Finally, the obtained results are compared with the incentive price of several countries, and it is shown that the proposed approach leads to an acceptable result and reasonable incentive price, while the planner's targets are considered as well.