Extended Kalman Filter-Based Approach for Nodal Pricing in Active Distribution Networks

This article presents an analytical approach based on Extended Kalman Filter (EKF) for nodal pricing in distribution networks containing private distributed generation (DG). An appropriate nodal pricing policy can direct active distribution network (ADN) to optimal operation mode with minimum loss. However, there are several crucial challenges in nodal pricing model such as: equitable loss allocation between DGs, obtain minimum merchandising surplus (MS), and equitable distribution of remuneration between DGs, which is difficult to achieve these goals simultaneously. However, in the proposed method, the issue was embedded in the form of the EKF updates. The measurement update reduces the MS, and in the time update, DG's nodal prices as state variables are modified based on their contribution to the loss reduction. Therefore, all aspects of the problem are considered and modeled simultaneously, which will prepare a realistic state estimation tool for distribution companies in the next step of operation. The proposed method also has the ability to determine the nodal prices for distribution network buses in a wide range of power supply point prices (PSP), which other methods have been failed, especially at very low or high PSP prices. Eventually, using the new method will move system towards to the minimum possible losses with the equitable condition. The application of the proposed nodal pricing method is illustrated on 17-bus radial distribution test systems, and the results are compared with other methods.

I. Introduction

With the development and penetration of distributed generations (DGs) in distribution networks (DNs), an appropriate economic decision from distribution companies (DISCOs) to the DGs will also be important for optimal operation of system so that DN change from passive to active distribution network (ADN) [1]. In this respect, there will be significant challenges for the DN, such as the uncertainties in the DGs, and computational difficulties with increasing number of participants in the energy market [2]. Also, an appropriate nodal pricing policy as an economical signal from DISCOs can make financial incentives for private DGs to participate in power generation and reduce power losses in the ADNs [3], [4]. This is analogous to relationship between independent system operator (ISO) and the participants in the competitive electricity market with the aim of maximizing their profits [5].