Analysis of the assumed cost of penalty payments in a municipal MV distribution network

Abstract

The paper presents the results of the analysis of the estimate of the cost of penalty payments for breaching the guaranteed standard of the electricity supply continuity. A real municipal MV cable distribution network was analysed. The estimate of the cost of penalty payments was obtained by simulating supply interruptions in the network by using a modified Monte Carlo method. The analysis is performed for various types of the guaranteed standard. Both the limit of the annual number of supply interruptions for a consumer and the limit of the total annual duration of supply interruptions are considered. The costs of penalty payments for the annual evaluation and the evaluation based on two-year mean values are compared. The results obtained reveal that, for the given network, the cost of penalty payments can represent an amount of money that cannot be neglected. Some conclusions are therefore given at the end of the paper which may be used by the managing staff of the distribution company when optimizing the distribution network just with the aim of reducing the cost of penalty payments.

Evaluation of the successive restoration of electricity supply to customers in distribution networks in connection with the regulation of electricity supply continuity

“…For getting idea about a different impact of considered views of the costs of penalty payments we calculated average annual costs of penalty payments for a composed customer's standard of electricity supply continuity setting a limit of the annual number of supply interruptions L n and a limit of their total annual duration L t (a logical "or" is valid between these limits, i.e. the penalty shall be paid when one of these limits or both two limits have been exceeded) [3]. All combinations of the following chosen values of these limits were evaluated:…”

Regulation of the electricity supply continuity and decision making of distribution companies about measures to be undertaken in the network

“…For that reason, when evaluating the measures to be undertaken in the network it is convenient even now to work with a composed standard establishing both the limit of the annual number of supply interruptions L n and the limit of the total annual duration of supply interruptions L t [2]. A logical "or" between the limits is valid in this case, the consumer will receive a penalization when at least one of the limits has been breached.…”

“…The costs of supply interruptions assessed by the simulation correspond to the costs of penalty payments due to not meeting the customer's standard of the electricity supply continuity. We consider a composed customer's standard with a jump-like penalization [2] with a limit of the annual number of supply interruptions L n and a limit of the total annual duration of supply interruptions L t . This standard is valid for all customers in the network.…”

Evaluation of Measures Undertaken in the Distribution Network Based on the Potential of Reducing the Costs of Supply Interruptions

“…A composed customer's standard with a jump-like penalization is considered [9]. This standard establishes a limit of the annual number of supply interruptions L n and a limit of the total annual duration of supply interruptions L t .…”