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Optimal Operating Strategy for Distributed Generation Considering Hourly Reliability Worth
In-Su Bae, Jin-O Kim, Senior Member, IEEE, Jae-Chul Kim, Member, IEEE, and C. Singh, Fellow, IEEE
AbstractThis paper presents a method to determine optimal operating strategy for distributed generation (DG) incorporating reliability worth evaluation of a distribution system. The use of DG for peak shaving could reduce the overall system operating cost and its use as standby power could reduce the customer interruption cost. If the DG operating cost is less than the utility power cost at peak time, DG should be employed to reduce the overall system operating cost. However, when customer interruption cost is also an important concern, standby power strategy for DG may be better than peak shaving. The reliability worth and the power cost evaluations are needed to determine whether DG should be operated for peak shaving or as standby power. The hourly reliability worth is incorporated in the strategy proposed in this paper to determine the optimal operating decision for the DG. Using the approach proposed in this paper, the distribution companies could determine the optimal operating strategy for their DG. Index TermsDistributed generation (DG), distribution system, reliability worth, sequential simulation.

tainty of system parameters cannot be easily and fully considered using these methods. On the other hand, the chronological issues and time varying uncertainties can be readily considered using the sequential simulation. In this paper, a sequential simulation technique is utilized to evaluate the reliability worth of the distribution system including DG. Generally, reliability indices have been calculated to represent the annual values that are average values for a year. In this paper, the concept of hourly reliability indices is used to represent the time varying characteristics of reliability. The hourly reliability worth can be included in the objective function of a distribution company that owns DG. A new six-state model for DG, including an optimal operating strategy signal, is introduced in this paper to consider the peak shaving or standby operating strategy, and is used to minimize the total operating cost of the distribution system containing DG. II. OPERATION OF DISTRIBUTED GENERATION The cost of utility power varies hourly depending on the demand and the availability of generation assets. One strategy for distribution companies is to use DG during periods of peak load when utility power is likely to be higher priced. The distribution companies may find that utilization of their DG systems is cheaper than the purchase of utility peak power for much of the year. The customers have come to expect uninterrupted electric service throughout the year. But outages do occur and to maintain high reliability, many distribution companies may install standby generators to supply power until utility service is restored. For these companies, the installation of standby generators is an economic choice based on extremely high interruption cost for their customers. The standby generators are sometimes underutilized generating resources [2]. It is possible that distribution companies can operate the standby generators also for peak load reduction programs during utility peak load periods [3]. The distribution companies can use DG as a part of optimal operating strategy that minimizes the power cost and at the same time, maximizes the reliability through an appropriate combination of standby power and peak-shaving modes of operation. III. SYSTEM MODEL Models for four components pertinent to analysis are described in this section: distribution network, load, interruption cost, and the DG.

I. INTRODUCTION

ISTRIBUTED GENERATION (DG) is expected to play an increasing role in electric power systems in the near future. By definition, the DG is of limited size (generally 10 MW or less) and connected at the substation, distribution feeder, or customer load level. The applications of DG include combined heat and power, standby power, peak shaving, grid support, and stand alone power. The DG technologies include photovoltaics, wind turbines, fuel cells, small and micro-sized turbine packages, internal combustion engine generators, and reciprocating engine generators [1]. These technologies are in a period of rapid expansion and commercialization. For example, installation of conventional internal combustion engine generators and small gas turbines is increasing as utility distribution system planners install them for reliability improvement and peak load shaving. Both analytical and simulation techniques have been used to evaluate the reliability of an electric power system containing DG. The analytical techniques are useful for evaluating the basic reliability indices, however, the time-varying nature and uncerManuscript received December 2, 2002. This work was supported by the Electrical Engineering and Science Research Institute (EESRI) under Grant 01-jung-04, which was funded by Electric Power Corporation (KEPCO). I. S. Bae and J. O. Kim are with the Department of Electrical Engineering, Hanyang University, Seoul 133-791, Korea (e-mail: bis@hanyang.ac.kr; jokim@hanyang.ac.kr). J. C. Kim is with the Department of Electrical Engineering, Soongsil University, Seoul 156-743, Korea (e-mail: jckim@ee.ssu.ac.kr). C. Singh is with the Electrical Engineering Department, Texas A&M University, College Station, TX 77843 USA (e-mail: singh@ee.tamu.edu). Digital Object Identifier 10.1109/TPWRS.2003.818738

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Fig. 1. Restoration time hourly factor during a day.

A. Component Models of Distribution Network Like in a typical distribution reliability analysis, components are assumed to be represented by two-state models. The effect of weather is included and, thus, the failure rates and the restoration times are functions of time. IEEE Std. 346 subdivides the weather environments into three classifications: normal, adverse, and major storm disaster [4]. The failure rates are assumed to be constant for a given weather condition. A can be obtained using the average time-varying failure rate failure rate in the normal weather condition weighted by the chronological variation of weather effect as follows: (1) where is the failure rate weather factor at hour , and is the average failure rate for the normal weather condition. can be calcuSimilarly, a time-varying restoration time lated as follows: (2) is the restoration time for the normal weather condiwhere tion, is the restoration time weather factor, and and are the restoration time daily and hourly factors, respectively, which represent the effect of available restoration resources determined by repair and switching experiences. Typis shown in Fig. 1. ical restoration time hourly factor B. Load Model A time-varying load model with different type of customers provides a more accurate representation by incorporating the load values for each hour. Detailed chronological customer load profiles are, however, generally not available in most utilities. An alternate way to develop time-varying load model is to combine the individual customer load characteristics with the annual peak load to generate annual model. Generally, customers are classified into seven categories: large user, industrial, commercial, agriculture, residential, government, and office. Therefore, at load point for the given type of customer the load can be calculated as follows: (3) where is the annual peak load for load point is weekly load as percentage of the annual peak for week is the daily load as percentage of the weekly peak on day , and is the hourly load as percentage of daily peak for the customer type at hour .
Fig. 2. Percentages of hourly load in terms of daily peak for residential and commercial customers during a day in the winter season. TABLE I SECTOR INTERRUPTION COST (DOLLARS PER KILOWATT)

For example, the typical for the residential and commercial customers in the winter season are shown in Fig. 2. C. Interruption Cost Model Postal surveys [5] have been conducted to estimate the customer interruption costs (CIC) for the seven different customer sectors. The survey data have been analyzed to give the sector customer damage functions (SCDF) shown in Table I, which describes the interruption cost for the given type of customer as a function of interruption duration. Interpolation and extrapolation of the cost data are used when the duration lies between two durations given in Table I or it is greater than 8 h [6]. In Table I, the interruption cost for each customer type depends only on the duration of interruption. However, the customer interruption cost for a given type of customer and outage duration could change with the time of occurrence. Variation in the interruption cost can be represented as a function of the hour of the day, the day of the week, and the month of the year. In order to easily incorporate the time-varying nature of customer interruption cost, interruption cost hourly factors for each customer type were developed in [7]. Fig. 3 shows the typical inter-

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Fig. 3. Interruption cost hourly factors for the type of four customers during a day.

model proposed here, however, can be extended to incorporate partial capacity states. and DG are the peak-shaving In this figure, DG is the state and a standby-power states of the unit, and DG that DG is unavailable due to DG failure. is the state that there are no outages in the distribution system, and is the state that outages happen within some parts of the system. and are the rates of occurrence of DG failure and system outage, and the reciprocal of the average duration of is a probability of starting DG failure and system outage. and are DG schedule times for peakfailure for DG, and shaving and standby power operation. Arrows in this figure show the possible transitions between states. State 1 represents the peak-shaving mode to supply electric service at predetermined load points, and component failures do not occur in the distribution system. If component failures occur in the system of state 1, there is transition to state 2 and if peak-shaving unit has not generated its maximum power at the time of system failure, then DG can supply electric service to the interrupted area. State 3 represents that peak-shaving unit failure occurs in the system of state 1, and the power from transmission system provides electric service for the load points that had been supplied by DG. State 4 indicates that both system component failures and DG failure occur. State 5 represents that the standby power unit waits for the emergency, but has not run yet. State 6 means that component failures occur in the system of state 5 and the standby power unit successfully starts running to supply electric service to the interrupted area.

IV. SIMULATION PROCEDURE The simulation procedure [11][13] consists of the following steps to conduct reliability worth analysis of the distribution system including DG [8]. 1) Generate the failure and restoration history for each component of the distribution system by drawing sample values of time-to-failure (TTF) and time-to-repair (TTR) of the component. The operating history of each component is in the form of chronological up-down-up operating cycles. 2) Using the operating strategy of the distribution company, generate operating history of the DG over the year under consideration. 3) Obtain the overall system operating history by combining the operating cycles of all components and DG. 4) Identify the DG state for the failed event according to the six-state model of DG. 5) Find the load points that are affected by each failed event . 6) Generate the time-to-switch TTS for the failed event . 7) Determine the outage durations , the outage start-time , and the outage end-time of the load point due to the failure event considering the DG state. If DG is used to supply power, the power supplied by DG during system outage should be recorded to calculate DG operating cost.

Fig. 4. Six-state model of DG operated as both peak shaving and standby power.

ruption cost hourly factors for the four types of customers used in this paper. The time-varying interruption cost can be obtained as follows: (4) is the appropriate interruption cost hourly factor where and is the average interruption cost provided by the SCDF. D. DG Model The DG operated in the distribution system for both peakshaving and standby power unit can be represented by the sixstate model shown in Fig. 4. Since typically the DG has a capacity less than 10 MW, it is assumed to have either full capacity or zero capacity. This is consistent with the normal generation reliability evaluation practice where partial capacity states are generally used for generating units of 100 MW or higher. The

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8) Determine the per unit interruption cost from the SCDF outage duration

using the (5)

tion system. Also, the longer the distribution company operates DG as a peak-shaving unit, the lower is the sum of utility power cost and DG operating cost. As a result, DG operating strategy could be determined by the following equation:

9) Determine the adjusted hourly per unit interruption cost , according to the interruption cost hourly factor, using the following: (6) 10) Evaluate the hourly interruption cost load point due to the failure event of the (7) is the not-supplied hourly load of the load where point due to the failure event at hour . of the 11) Obtain the hourly interruption cost load point using the following equation: (8) 12) Repeat steps 7)11) for the all-load points. 13) Repeat steps 4)12) for the all-failed events. 14) If the total simulation time is less than the specified simulation years, go to step 1); otherwise, go to step 15). 15) Determine the expected hourly interruption cost of the load point during the total simulation time (TST) using the following equations: (9) (10) where is the expected annual average interruption cost of the load point per year. V. OPTIMAL OPERATING STRATEGY OF DG The main objective of this paper is to obtain the optimal operating strategy of DG that minimizes the sum of utility power cost, DG operating cost, and interruption cost [9]. Thus, objective function can be expressed as follows:

(12) and are the values of and in where and are the period of peak-shaving strategy, and the corresponding values in period of standby power strategy. It should be noted that (12) includes the costs over all the load points. and are the expected In (12), hourly interruption costs when, during the year, the distribution company has operated DG as peak-shaving unit and as standby in (12) can be used as a power unit, respectively. The signal to determine DG operating strategy by the distribution company. To minimize the objective function, the distribution company should operate DG as a standby power unit or as a peak-shaving unit depending on positive or negative values of . The methodology explained in this paper has used one DG unit for the sake of simplicity. If there were more than one DG units, the process would be more complex as the values used in (12) would need to be calculated for various possible combinations of DG states and the decision arrived appropriately. VI. CASE STUDIES An urban distribution system connected to bus 2 of the RBTS was modified to conduct the case studies. The modified system is shown in Fig. 5, which is a typical distribution system with four feeders. The basic reliability parameters for this system are given in [10]. The TTRs of the components were assumed to have log-normal distributions with standard deviations of one third of their average values. The TTFs of the components were assumed to have exponential distributions. The switching times (TTSs) have normal distributions with standard deviations of one third of their average values. A micro-sized gas turbine generator is incorporated in the system. The rated output of the DG unit is 5.0 MW, and the mean time to failure and mean time to repair of the DG are 550 h and 75 h [11], respectively. The total average load is 12.291 MW, and the peak load is 20 MW. The other parameters used are: average duration of normal and adverse weather: 724 h, 4 h; percent failures occurring in adverse weather: 50; failure rate-weather factor of line: 181; restoration time-weather factor of all components: 1.3. The system containing DG that is operated only as a peak-shaving unit throughout the year (case 1) and the system containing DG only as a standby power unit throughout the year (case 2) are simulated to provide the expected hourly interruption costs for the peak-shaving and standby power, and . The and for the two cases during a certain 24-h period for are shown in Fig. 6. It can be seen that the from case 2. case 1 is higher than the

(11) is the utility power cost, is the DG operwhere is the utility power cost per megawatt, is the ating cost, DG operating cost per megawatt, is the load using utility is the load using DG power. power, and Typically, the longer the distribution company operates DG as a standby power unit, the lower is the reliability of the distribu-

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TABLE II RESULT OF TEST SYSTEM ANALYSIS FOR EACH CASE

Fig. 5. Modified distribution system for RBTS bus 2 including a DG.

Fig. 7. Fig. 6. Hourly reliability worth of cases 1 and 2 during a day.

Total operating costs for each case.

In case 3, the distribution company determines the DG opand erating strategy considering both utility power cost but does not consider interruption cost. DG operating cost with . In case 4, The distribution company compares the annual average value of interruption cost, , is also considered in addition to case 3. In case 5, hourly interruption , is considered instead of annual average value cost, from (12) is used in case 4. In case 5, the decision signal to minimize the total operating cost. The various operating costs for the above five cases are shown in Table II. It can be seen that the total operating cost of case 1 is the highest. The DG has relatively higher failure rate than larger generators connected to the transmission system, and the peak-shaving unit in period of low utility power cost makes total operating costs increase. If the distribution company ignores the customer interruption cost, then case 3, which compares utility power cost and DG operating cost, is the best case. The sum of utility power cost and DG operating cost (except interruption cost) is U.S.$ 13 807 647/year in case 3, and that is the lowest value among the five cases. However, to incorporate the component of reliability, the distribution company should include the customer interruption cost in their total operating cost. The total operating cost for each case is shown in Fig. 7. The total operating cost for case 5 using hourly reliability worth (hECOST) is lower than that for case 4 using annual average reliability worth (ECOST). This indicates that the hourly reliability worth (hECOST) is an im-

portant index for optimizing the operating strategy of DG. However, it is also important to select the system model that matches the practical system in order to obtain hECOST. If the distribution company that own DGs can obtain the accurate values of hECOST, then those values could help to determine the optimal operating strategy of their DGs. VII. CONCLUSION A method for determining the optimal operating strategy for the DG has been presented. This approach takes into consideration the hourly reliability worth in the distribution system. A new six-state DG model including the DG operating strategy, the distribution system state, and the transition relationship between each state, has been introduced and described. The sequential Monte Carlo simulation using various time-varying weight factors was used to obtain hourly reliability worth. The comparison of five cases shows that the hourly reliability worth could be a useful index in the determination of operating strategy for the distribution companies that install DG. REFERENCES
[1] P. A. Daly and J. Morrison, Understanding the potential benefits of distributed generation on power delivery systems, in Proc. Rural Electric Power Conf., 2001, pp. A2/1A2/13. [2] R. E. Brown and L. A. A. Freeman, Analyzing the reliability impact of distributed generation, in Proc. IEEE Power Eng. Soc. Summer Meeting, vol. 2, 2001, pp. 10131018. [3] B. Maurhoff and G. Wood, Dispersed generationReduce power costs and improve service reliability, in Proc. Rural Electric Power Conf., 2000, pp. C5/1C5/7.

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[4] P. Wang and R. Billinton, Reliability cost/worth assessment of distribution systems incorporating time-varying weather conditions and restoration resources, IEEE Trans. Power Delivery, vol. 17, pp. 260265, Jan. 2002. [5] G. Toefson, R. Billinton, G. Wacker, E. Chan, and J. Aweya, A Canadian customer survey to assess power system reliability worth, IEEE Trans. Power Syst., vol. 9, pp. 443450, Feb. 1991. [6] Y. Ou and L. Goel, Using Monte Carlo simulation for overall distribution system worth assessment, in Proc. Inst. Elect. Eng.-Gen. Transm. Dist., vol. 146, 1999, pp. 535540. [7] R. Billinton, G. Wacker, and G. Tollefson, Assessment of Reliability Worth in Electric Power Systems in Canada,, NSERC Stratgic Grant STR0 045 005, 1993. [8] Y. Ou and L. Goel, Subtransmission system reliability worth assessment using the Monte Carlo simulation method, in IEEE Power Eng. Soc. Winter Meeting, vol. 2, 1999, pp. 11711176. [9] Y. Zoka, S. Kashiwai, H. Sasaki, J. Kubokawa, and K. Kawahara, A study of allocation planning of dispersed electrical and thermal energy systems into distribution networksOperation planning, in Proc. Int. Conf. PowerCon, vol. 1, 2000, pp. 4347. [10] R. N. Allan, R. Billinton, I. Sjarief, L. Goel, and K. S. So, A reliability test system for educational purposesBasic distribution system data and results, IEEE Trans. Power Syst., vol. 6, pp. 813820, May 1991. [11] C. Singh and R. Billinton, System Reliability Modeling and Evaluation, London, U.K.: Hutchinson, 1978. [12] G. Anders, Probability Concepts in Electric Power Systems. New York: Wiley, 1990. [13] R. Billinton and W. Li, Reliability Assessment of Electric Power Systems Using Monte Carlo Methods. New York: Plenum, 1994.

In-Su Bae received the B.S. and M.S. degrees in electrical engineering from Hanyang University, Seoul, Korea, in 1998 and 2003, respectively. He is currently pursuing the Ph.D. degree in the Department of Electrical Engineering at Hanyang University.

Jin-O Kim (SM03) received the B.S. and M.S. degrees in electrical engineering from Seoul National University, Seoul, Korea, in 1980 and 1983, respectively, and the Ph.D. degree from Texas A&M University, College Station, in 1991. Currently, he is an Associate Professor with the Department of Electrical Engineering at Hanyang University, Seoul, Korea. His research interests include power system reliability, planning, and power economics.

Jae-Chul Kim (M88) received the B.S. degree in electrical engineering from Soongsil University, Seoul, Korea, in 1979, and the M.S. and Ph.D. degrees in electrical engineering from Seoul National University, Seoul, Korea, in 1983 and 1987, respectively. Currently, he is a Professor of electrical engineering at Soongsil University, where he has been since 1988. His areas of interest are distribution automation systems, diagnosis of power system equipment, and battery energy storage system (BESS).

C. Singh (F91) is Regents Professor and Department Head of Electrical Engineering at Texas A&M University, College Station. He was also Director of NSF Power System Program from 1995 to 1996. Dr. Singh is a Senior TEES Fellow at Texas A&M University and recipient of the IEEE 1998 Distinguished Power Engineering Educator Award. He also received the 19861987 Halliburton Professorship and the 19921993 Dresser Professorship.