Quantifying the benefits of Distributed Generation including the impact of energy policy

The concept of Distributed Generation (DG) has gained popularity in recent years because of the need for more flexible electrical power systems, the change in the regulatory and economic scenarios, the growing recognition of the importance of harnessing renewable energy resources and environmental protection. This paper aims to develop mathematical models to quantify and analyse the benefits of introducing DG into the existing power systems. Following a brief introduction the paper divides the benefits of DG into two major categories: direct and indirect. Since all the benefits can be represented in monetary terms, a composite mathematical model has been developed to assess and quantify the benefits of utility- as well as customer-owned DG. This model includes the impact of energy policies and is therefore potentially more accurate in quantifying the true benefits of DG under existing and future regulatory frameworks and the energy (electricity) market environment. In order to demonstrate the proposed approach a case study is presented with an example power system from the UK. Simulation results show that such an approach allows more robust decisions to be taken regarding the development and deployment of DG and associated policies.