Optimal Investment Planning for Distributed Generation in a Competitive. Electricity Market.

This paper proposes a new heuristic approach for distributed generation (DC) capacity investment planning from the perspective of a distribution company (disco). Optimal sizing and sitting decisions for DC capacity is obtained through a cost-benefit analysis approach based on a new optimization model. The model aims to minimize the disco's investment and operating costs as well as payment toward loss compensation. Bus-wise cost-benefit analysis is carried out on an hourly basis for different forecasted peak demand and market price scenarios. This approach arrives at the optimal feasible DC capacity investment plan under competitive electricity market auction as well as fixed bilateral contract scenarios. The proposed heuristic method helps alleviate the use of binary variables in the optimization model thus easing the computational burden substantially. [ABSTRACT FROM AUTHOR]