Economic Evaluation of Voltage Sags Mitigation Scheme Based on Decoupled Net Present Value

Under the pressing demand for voltage sags mitigation, the effect of voltage sags mitigation and its economic benefits will directly affect the selection of voltage sags mitigation scheme by investors. Therefore, it is necessary to evaluate the economic benefits of the voltage sags mitigation scheme. The Net Present Value (NPV) method is the most commonly used economic evaluation method, in which the future net cash flow of the project is discounted to its present value at a certain discount rate for comparison, but the selection of the discount rate is difficult. The traditional method uses only the risk-free rate for discounting. As for long-term infrastructure investment projects in the category of voltage sags mitigation program, the project risk has a significant impact on the results of its economic evaluation, and it is not feasible to use only the risk-free rate for discounting. This paper introduces the influence of risk factors on the economic benefits of the project, and uses the Decoupled Net Present Value (DNPV) method to evaluate the economics of the voltage sags mitigation scheme, and takes the mitigation scheme at the node with severe voltage sags in the IEEE-30 network as an example to evaluate the economic benefits of the scheme, and compares it with the traditional NPV method, and verifies that the evaluation results of the DNPV method are more reliable than the traditional NPV method after considering the risk factors.