A Combination of Evolutionary Algorithm and Game Theory for Optimal Location and Operation of DG from DG Owner Standpoints

The use of distributed generation (DG) resources is seen as a key important factor in improving technical and economic aspects of distribution systems. However, little research exists concerning the optimal location and operation of DGs. This paper proposes a novel method to find simultaneously the optimal location and operation of DGs. The method is developed in two phases, namely Phase 1 and 2. Phase 1 deals with the optimal location of DGs using a multiobjective optimization problem in which active power loss reduction, voltage profile improvement, and voltage regulation are the objectives. A Pareto frontier differential evolution (PDE) algorithm is developed to solve the multiobjective problem. Phase 2 copes with the optimal income of the DGs’ owners along with the optimal total payment of the distribution company by adopting a bi-level optimization method with two agents. Game theory is employed to assist in finding optimal contract prices. The performance of the proposed method is evaluated by using two IEEE, 33-bus, and 69-bus, standard distribution networks. This paper concludes that the proposed method can serve as an accurate tool for practitioners in finding the optimal location and operation strategy of DGs.