Optimal placement of distributed generator in transmission system using an algorithmic approach

This paper presents the optimal placement of distributed generation (DG) in locational marginal price (LMP) based electricity market. The problem formulation for optimal placement of DG is based on maximization of social welfare subject to operational and security constraints. In this paper, an algorithmic approach has been used based on LMPs and CPs for optimal placement of DG. LMP at a particular location provides an economic signal to the consumers and suppliers for their power consumption and generation, respectively. CP at load bus is defined as the product of LMP and real power demand at that load bus. The system buses have been ranked for optimal placement of DG based on decreasing order of LMPs and CPs. Various cost characteristics are assumed in test system to examine the proposed methodology. The proposed methodology has been tested on IEEE 14-bus system. The simulation results clearly present the effectiveness of the proposed methodology.