Distributed Generation (DG) Planning in Distribution Networks to Maximize the Social Welfare

Application of the distributed generation (DG) is a direct consequence of deregulation of modern power networks. Regulatory changes and advances in DG technologies have led utilities to consider these technologies as alternative to central generation. With regard to regulations imposed by tariff and also the market competition, the exact planning of distribution networks to avoid overinvestment is quite necessary. Most of the studies in this field which were carried out in the past are concerned with investments aiming to maximize the investors’ benefits. In addition, the impact of various DG technologies has not been considered in the planning procedure. Each investment planning for DG can be assessed from the viewpoint of distribution companies, regulatory entities or consumers. It is obvious that both the distribution companies and consumers regard their own benefits, whereas the regulator will prefer only those plans which benefit both parties. In this paper, a new approach is presented for DG investment in distribution network in which the benefits of both entities are taken into account. The benefits for utility are provided through system loss reduction while for consumers via purchasing energy from DG instead of grid. These objectives are described as social welfare and its maximization is our main goal in this paper. Furthermore, the impact of DG technologies is considered and the best one is selected. The genetic algorithm (GA) is employed to solve this optimization problem since it can provide the global solution by its inherent capability in modeling the complex constraints.