Recursive Analysis of Power Distribution Costs in a System with Multiple Classes of Energy and Applications to a Small Power System

In distribution system planning, and when designing tariffs and special contracts for both general customers and special large consumers of electrical energy, it is essential to have comprehensive information about the cost structure of the distribution system for different classes of customers and in different locations. In this paper a comprehensive model is presented to analyse the cost structure of a transmission and distribution system, with either a radial or "network" configuration taking into account multiple electrical power classes. The power system is decomposed into different subsystems and the model is recursive with respect to these subsystem. The model deal with information on subsystem investment and operations costs. loss factors, power peak demand, energy flow, coincidence factors etc. The model calculates unit costs of power and energy for different classes and at different levels in the system, and is based on the philosophy of decomposing costs into energy costs and capacity (power) costs. The model has been applied to data from a power distribution company in Iceland, where power is purchased from a bulk supplier (The National Power Co.) by 2 separate classed, designated as firm energy and secondary energy. Firm energy is purchased using a block type tariff which can be translated to a tariff with energy and demand charges, while secondary energy purchases are based on a flat energy charge. The model has been programmed using a typical spreadsheet personal computer software, and in this application the purpose is to investigate energy cost structure and cost breakdown for firm and secondary energy classes at different locations in the system. To allocate the cost of losses for both energy classes, a special method for measuring secondary energy, utilized for technical reasons, is accounted for in the model. The results include a review of sensitivity and interaction between these firm and secondary energy classed, which is especially valuable, when developing tariffs and/or contracts for special energy intensive customers.