Optimal Operation of Distribution Network with Distributed Generations to Maximize Social Welfare

Retail electrical power marketers, also known as retailers, typically set up contracts with suppliers to secure electricity at fixed prices on the one hand and with end users to meet their load requirements at agreed rates on the other hand. High penetration of distributed generation (DG) resource is increasingly observed worldwide. From the viewpoint of a retailer, this paper analyzes the problem of setting up contracts on both the supplier and end-user sides to maximize profits while maintaining a minimum operational cost of the distribution network with distributed generations. Proposed two-level optimization model in this paper, can minimize cost of distribution system with Distributed Generation and maximize profits of retailers. Numerical simulations are carried out based on an IEEE 33-bus test distribution network. Test results are included to show the performance of the proposed method.