Evaluation of the customer value of component redundancy in electrical distribution systems

Abstract

Abstract-A new regulatory model for the Swedish electrical distribution system operators has been proposed, and is now being implemented. The model is referred to as the Network Performance Assessment Model (NPAM). The NPAM is based on fictive reference networks. These emanate from a radial network that is reinforced with redundant components if it increases the customer value more than required investment cost for higher system reliability. The NPAM involves a paradigm shift for the Swedish DSO from a system based on compensation for costs to one based on performance. Evidently, it is of great importance to both the regulator and the different DSOs to evaluate how well the NPAM calculates the performance i.e. the customer values. The aim for this paper is to take a first step in this process; by putting light on how these redundant reference networks are created and used for the NPAM. In order to do this a comparative study has been made for a small test system where two different approaches are used for identifying the resulting redundant reference network for a system. The NPAM approach uses a Monte Carlo simulation technique, and the comparative approach uses an analytical based reliability assessment tool RADPOW, developed at KTH.Index Terms-Customer value, Electrical distribution systems, Network Performance Assessment Model, Outage cost, Power systems, Probability, Performance based regulation, Redundancy, Reference networks and Reliability. I. INTRODUCTIONlectrical energy customers generally require high availability in the power supply. However, if, as for other goods, the customer were to pay a price for electricity corresponding to the customer value, different customers, such as industrial or household, would have different values for energy not supplied Consequently, there would be different set of prices for power supply from a customer point of view. From the perspective of the electrical distribution system operator (DSO), there is a cost for operation and maintenance of the electrical distribution system, to balance against the requirements for system reliability and the profit for the stakeholders. In a perfect market environment, a balance would be reached where customers select the DSO with the best price for the required customer value. However, the infrastructure for the electrical distribution system is in most cases still under a monopoly. To manage this situation the authorities apply different regulatory tools. In Sweden, a The NPAM aims to regulate the network tariffs, i.e. the price that the DSO charges the power supply customers, based on the customer value. An increase in network tariffs should then only be valid if it creates higher customer value, e.g. by increased system reliability. It is important to realize, however, that an increase in system reliability does not necessarily lead to a corresponding increase in customer value. The increase in customer value might be lower than the cost of increasing the reliability and the DSO will not be completely compensated by the network ...

Risk and reliability assessment for electrical distribution systems and impacts of regulations with examples from Sweden

“…and 24 h are important limits for Swedish DSOs in maintenance and investment planning (Larsson 2005). Figure 1 presents results from an ongoing application study showing the expected number of outages longer than 12 h as a function of changed mean outage time.…”

“…However the distribution was still operated as regional natural monopolies, with responsibilities as well as privileges (Bertling et al 2005). Earlier, the DSOs were more or less allowed to compensate for all their costs by settling tariff levels regardless of the effectiveness and quality.…”

“…Despite several attempts to keep the tariffs down, e.g., through price freezing, no solution was effective. It was therefore necessary to find a new regulation paradigm (Bertling et al 2005). In 1998, a project was initiated by STEM to propose a new regulation model (Wallnerström and Bertling 2010).…”

Learning from experiences of the prior Swedish electrical distribution system regulation — Reference material when developing the future regulatory incentives

“…through price freezing, no solution was found. There was therefore needed to find a new regulation paradigm [3].…”

Investigation of the Robustness of the Swedish Network Performance Assessment Model

“…To answer this question, the authors carried out a long-term in-depth examination of the underlying theory for the model, in cooperation with both the inventor of the model and its users. The results are reported in [8]- [11]. In 2005, the authors were commissioned by the Swedish DSOs to investigate the robustness of the NPAM.…”