5236 IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO.

5, SEPTEMBER 2018

Optimal Planning Strategy for Distributed Energy

Resources Considering Structural
Transmission Cost Allocation
Jianxiao Wang, Student Member, IEEE, Haiwang Zhong, Member, IEEE,
Qing Xia, Senior Member, IEEE, and Chongqing Kang, Fellow, IEEE

Abstract—A well-designed transmission cost allocation (TCA) OC Subscript for operating conditions
scheme is able to reflect each consumer’s contributions to the CC Subscript for contingency conditions
actual usage of transmission assets, thereby generating fair price PC Subscript for planning conditions
signals to guide consumers in making investments. In this paper,
an optimal planning strategy and a model for distributed energy IC Subscript for invalid conditions
resources (DERs) are formulated, considering structural TCA. In c̃ The N-1 contingency when power flow reaches
the proposed TCA scheme, the transmission costs are identi- the maximum
fied according to the actual usage of transmission assets under G Superscript for traditional centralized generators
different conditions. The effects of DERs on TCA are consid- LD Superscript for load demand
ered. Because the DERs have a fast-response capability at each
time slot, DERs are able to provide power support for the NLD Superscript for net load demand
bulk power system in an emergency and thus can efficiently DER Superscript for distributed energy resources
reduce the peak loads of the system and relieve the conges- WT Superscript for wind turbines
tion of transmission assets. This grid-friendly manner allows PV Superscript for photovoltaic panels
lower transmission prices, thereby decreasing the DER operators’ ESS Superscript for energy storage systems
transmission costs. Therefore, by strategically investing in and
operating DERs, consumers can reduce their electricity energy α Subscript for charging
cost and transmission cost and maximize long-term revenue. To β Subscript for discharging.
address the uncertainties of load growth and distributed energy
fluctuation, stochastic programming is adopted. Restricted by the
non-analytical mapping between transmission prices and plan- Parameters and Constants
ning strategies, an algorithm is presented to iteratively solve the
problem. Case studies based on a 3-bus test system and IEEE TC Transmission cost
118-bus system with various DERs verify the effectiveness of the L Number of transmission lines
proposed scheme. Fk Transmission capacity of line k
k
Fvalid Valid capacity of line k over a long period
Index Terms—Distributed energy resource (DER), distributed
k
fmax Maximum power flow on line k in a year
generation planning, stochastic programming, transmission cost
allocation (TCA). cG
i Unit cost of generator i
GSDF i−k Generation shifting distribution factor of node i
to line k
N OMENCLATURE Gi−k,t Generalized load distribution factor of node i to
Indices and Sets line k at time slot t
N Number of nodes in the power system
t Time index N WT Number of potential wind turbines
s Scenario index N PV Number of potential photovoltaic panels
k Line index N ESS Number of potential energy storage systems
c N-1 contingency index ICi Investment cost of DER i
Manuscript received July 31, 2016; revised November 19, 2016 NS Number of scenarios
and January 31, 2017; accepted March 11, 2017. Date of publication T Number of time intervals
March 21, 2017; date of current version August 21, 2018. This work was γs Weight of scenario s
supported in part by the National Natural Science Foundation of China under
Grant 51537007, in part by the National Key Research and Development cEt Energy price at time slot t
Program of China under Grant 2016YFB0900103, and in part by the State cTC
t,s Transmission price at time slot t in scenario s
Grid Corporation of China under the Project titled “Key Technology of Multi- ICmax Investment budget for DERs
Spatio-Temporal Power Trading in the Ultra-High Voltage Interconnected
Network.” Paper no. TSG-01004-2016. (Corresponding author: Qing Xia.) PWT,max
i,t,s Forecasted available power of WT i at time slot
The authors are with Tsinghua University, Beijing 100084, China (e-mail: t in scenario s
qingxia@mail.tsinghua.edu.cn). PPV,max
i,t,s Forecasted available power of PV i at time slot t
Color versions of one or more of the figures in this paper are available
online at http://ieeexplore.ieee.org. in scenario s
Digital Object Identifier 10.1109/TSG.2017.2685239 PESS,max
i,α Maximal charging power of ESS i
1949-3053 c 2017 IEEE. Personal use is permitted, but republication/redistribution requires IEEE permission.
See http://www.ieee.org/publications_standards/publications/rights/index.html for more information.

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WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA 5237

PESS,max
i,β Maximal discharging power of ESS i planning. On the other hand, a fair TCA scheme reflects
ηi,α
ESS Charging efficiency of ESS i consumers’ contributions to the actual usage of transmis-
ηi,β
ESS Discharging efficiency of ESS i sion assets [4], thereby generating effective prices that can
SOCESS Minimal state of charge of ESS i guide users in making investments. Therefore, it is imper-
i,min
ative to design a pricing mechanism to reasonably allocate
SOCESS i,max Maximal state of charge of ESS i
transmission costs to users in the power system.
CiESS Capacity of ESS i
ESS With the development of TCA research, the usage of trans-
Ei,0,s Initial stored energy of ESS i in scenario s
mission assets contributed by different users can be identified
PLD
i,t,s Load demand of node i at time slot t in scenario s. in the transmission prices. According to the incentive compat-
ible principle [5], users should benefit from a lower transmis-
Variables sion price if they are devoted to reducing the usage of trans-
mission assets. For instance, by installing distributed energy
f k,t Power flow on line k at time slot t
resources (DERs), the transmission prices for the DER opera-
PG i,t Power of generator i at time slot t
tor should drop if DERs reduce the utilization of transmission
PNLD
i,t,s Net load demand of node i at time slot t in
assets [6]. Therefore, rational users will make strategic invest-
scenario s
ments in DERs to reduce their electricity and transmission
CIDER Investment costs of DERs
costs, thereby maximizing their long-term revenue.
CELD Electricity costs of load demand
In the existing research, the distributed energy planning
ui Binary variable. 1 for investing in DER i and
problem is aimed at minimizing the total cost over the period
0 otherwise
of return on investment (ROI), wherein transmission prices
PWT
i,t,s Power of WT i at time slot t in scenario s
are taken as exogenous conditions. With the increase in large-
PPV
i,t,s Power of PV i at time slot t in scenario s scale DERs, the fast-response capability of DERs can help
PESS
i,t,s,α Charging power of ESS i at time slot t in reduce the peak loads of the system and relieve the congestion
scenario s of transmission assets [7]. This grid-friendly manner should
PESS
i,t,s,β Discharging power of ESS i at time slot t in be rewarded with lower transmission prices. Thus, the actual
scenario s power flows and TCA will be dramatically influenced by the
ESS
Ei,t,s Stored energy of ESS i at time slot t in scenario s DER operation. However, the existing research cannot con-
RU DER
t,s Response-up capacity of DERs at time slot t in sider the contributions of DERs to the bulk power system,
scenario s among which the transmission prices are predefined. As an
RDDER
t,s Response-down capacity of DERs at time slot t important component of electricity prices, the transmission
in scenario s price can no longer be considered an exogenous condition but
RU WT
i,t,s Response-up capacity of WT i at time slot t in instead is correlated with the planning strategies for DERs.
scenario s Therefore, it is essential to evaluate the contributions of DERs
RU PV
i,t,s Response-up capacity of PV i at time slot t in to TCA and incorporate TCA into DER planning.
scenario s
RU ESS
i,t,s Response-up capacity of ESS i at time slot t in
scenario s B. Literature Review and Contribution
RDWT
i,t,s Response-down capacity of WT i at time slot t in Distributed energy planning has been widely investigated in
scenario s past decades [7], [11]. In [12], an integrated model for solving
RDPV
i,t,s Response- down capacity of PV i at time slot t distribution system planning (DSP) is proposed by implement-
in scenario s ing distributed generation (DG). The model aims to minimize
RDESS
i,t,s Response- down capacity of ESS i at time slot t the DGs’ investments and operating costs at a predefined level
in scenario s. of electricity price. In [13], a model that considers DGs in the
DSP problem is established with the optimal power flow (OPF)
model embedded. Given the electricity prices, the objective
I. I NTRODUCTION
of the model is to minimize the capital costs for network
A. Motivation upgrade, the operation and maintenance costs. To jointly
N A MARKET environment, a proper price signal can pro- expand the DG and distribution networks, a multistage expan-
I vide an incentive for users to rationally consume energy and
make investments. In practice, transmission prices are impor-
sion planning model is presented in [14]. The model aims
to minimize the total cost including investment, maintenance,
tant components of the electricity price. For instance, trans- production and losses. In [15], a methodology for distributed
mission prices generally account for approximately 10% of the multi-energy generation (DMG) systems is presented. Subject
retail prices in the Pennsylvania-New Jersey-Maryland (PJM) to long-term uncertainties, stochastic programming is used to
market in the USA [1]. This value can reach 30% in the minimize the operation and investment costs of DMG systems.
U.K. [2]. On the one hand, a well-designed transmission cost In [16], the effects of DG on transmission investment deferral
allocation (TCA) scheme can encourage the effective usage of are analyzed based on the Queensland electricity market in
transmission assets and defer the transmission expansion [3], Australia. The transmission expansion model is formulated as
thus improving the economic efficiency of the power system a multi-objective optimization problem.

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5238
In the existing literature, transmission price is taken as
an exogenous condition. With the increasing penetration of
distributed energy, transmission prices can no longer be
predefined but are greatly influenced by the operations of
DERs [17]. Therefore, it is essential to evaluate the contri-
butions of DERs to TCA and to incorporate TCA into DER
planning. At present, there has been extensive research focused
on improvement of the TCA scheme. In [18], the power flow
tracing method is improved. In the scheme, a linear con-
strained optimization problem is constructed to determine the
real power flows instead of the proportionate sharing rule.
In [19], N-1 secure system operation is considered. The max-
imum power flows under contingencies are used to measure
the network usage. However, this study fails to identify the
valid capacity and the corresponding costs. In [20], a method-
ology is proposed to allocate the distribution network use
costs to all consumers that are using the network in each
period. However, only operational costs are allocated with-
out considering the capacities reserved for contingencies and
planning.
To the best of our knowledge, how to determine DG
planning considering the effects of DERs on TCA has not
yet been investigated. Therefore, the optimal planning strat-
egy for DERs considering structural TCA is proposed in
this paper. A novel TCA scheme considering the effects
of DERs is presented. The transmission prices can then
be expressed as a function of the operational conditions
of DERs, incorporated in the planning model. By strategi-
cally investing in and operating DERs, consumers can reduce
their electricity energy cost and transmission cost to maxi-
mize long-term revenue. Stochastic programming is adopted
to handle the uncertainties of load growth and renewable
energy fluctuation. Restricted by the non-analytical mapping
between transmission prices and planning strategies, an iter-
ative algorithm is presented to solve the optimal planning
problem.
The major contributions of this paper are as follows.
1) A novel TCA scheme considering effects of DERs is
proposed to generate a spatially and temporally differentiated
transmission tariff. Because DERs have fast-response capabil-
ity at each period, DER operators can flexibly adjust the output
of DERs, thereby reducing the peak loads in the bulk power
system and relieving the transmission congestion. A reward
mechanism for DERs is designed to measure the contributions
of DERs’ fast-response capability.
2) A bi-level mathematical model of the optimal planning
strategy for DERs considering structural TCA is established.
On the lower level, transmission prices can be computed
according to the proposed TCA scheme. On the upper
level, the planning strategy for DERs, including wind tur-
bines (WTs), photovoltaic panel (PVs), and energy storage
systems (ESSs), can be optimized. An iterative solution
method is adopted to solve the bi-level planning model.
3) Stochastic programming is used to consider the uncer-
tain environment in the planning of DERs. Considering the
uncertainties in load demands and DER generation, multiple
scenarios are generated to achieve the optimal planning
for DERs.
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IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO. 5, SEPTEMBER 2018
Fig. 1. Framework of optimal planning strategy considering structural TCA.
II. F RAMEWORK
The framework of the optimal planning strategy for DERs
considering structural TCA is illustrated in Fig. 1.
As shown in the framework, the problem can be formulated
as a market equilibrium problem with two levels. On the lower
level, the system operator computes the structural TCA on
the basis of security-constrained economic dispatch (SCED).
The transmission prices can then be acquired according to the
proposed TCA scheme. On the upper level, the planning strat-
egy for DERs, considering structural TCA, is optimized, with
the transmission price as an exogenous condition. Therefore,
the bi-level model of the optimal planning strategy for DERs
considering structural TCA can be established. The upper
and lower levels are iteratively solved until convergence.
Considering most researches on mathematical program with
equilibrium constraints (MPEC), this paper is focused on
strategically making investments for DERs while incorporat-
ing TCA, and analyzing the effects of TCA on DERs planning.
Hence, one consumer optimally plans DERs on the upper level
and the transmission prices are cleared on the lower level. The
rest of this paper is organized as follows: In Section III, the
structural TCA scheme, considering the effects of DERs, is
presented. In Section IV, the optimal planning model is estab-
lished. In Section V, an iterative solution method is proposed
to solve the bi-level model. In Section VI, the case studies
verify the effectiveness of the proposed scheme and model.
Section VII concludes the study.
III. S TRUCTURAL TCA C ONSIDERING
E FFECTS OF DER S
As shown in the literature review, fixed levels of load
demands are generally used as exogenous conditions in the
existing TCA schemes. However, with the increase of large-
scale DERs in smart grids, the DG significantly influences the
TCA results. From the system level, DERs can help reduce
the peak loads of the bulk power system and relieve transmis-
sion congestion. How to design a fair TCA scheme to boost the
development of distributed energy still requires in-depth study.
A structural TCA scheme considering the effects of DERs,
based on our previous work [4], is presented in this section.
In the proposed TCA scheme, due to the fast-response capa-
bility of DERs, DERs can help reduce power flows during
WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA 5239

contingencies. Thus, the DER operators can have a lower time slot t, equal to the difference between the load demand
transmission price, which will further encourage them to invest and the output of DERs. GSDFci−k is the generation shifting
in DERs. Therefore, it is imperative to divide the structural distribution factor (GSDF) of node i to line k, and the subscript
transmission costs and to consider the effects of DERs. c indicates line c is forced to be offline under N-1 contingency.
Particularly, c = 0 represents the normal condition where no
A. Transmission Cost Identification lines are offline.
According to our previous work [4], the structural trans- Therefore, TCOC reflects the physical usage of transmission
mission costs (TCs) can be identified and divided into four assets for OCs. TCCC is related to the power flow increase dur-
components: 1) TCs for operating conditions (OCs); 2) TCs ing contingencies, i.e., the reserve capacity for power system
for contingency conditions (CCs); 3) TCs for planning condi- faults. TCPC reflects the potential actual usage of transmis-
tions (PCs); and 4) Invalid TCs. The expressions are shown sion assets over a long time horizon. These three components,
below: comprising the valid transmission costs, are allocated in the
  following subsection.
k,t  k,t  k
TCOC = TCk · fOC  F , ∀k, t, (1)
  
k,t  k,t  B. Transmission Cost Allocation
TCCC = TCk · fc̃k,t − fOC  F k , ∀k, t, (2)
k,t  k,t k,t
In this paper, all transmission costs are assumed to
TCPC = TCk · Fvalid
k
F k − TCOC − TCCC , ∀k, t, (3) be paid by consumers. Generalized load distribution fac-
k,t k,t k,t k,t
TCIC = TCk − TCPC − TCCC − TCOC , ∀k, t, (4) tors (GLDFs) [23] are adopted to measure the contributions of
consumers to the power flows. On OCs, the transmission cost
where TCk,t OC is the transmission cost of line k at time slot t of line k paid by node i at time slot t, denoted by TCOC i−k,t
, is
k,t
for OCs. fOC is the power flow of line k at time slot t for OCs. expressed below:
k,t  
TCCC is the transmission cost of line k at time slot t for CCs.  i−k,t  i,t i,t
fc̃k,t is the maximum power flow of line k at time slot t for both GOC POC δOC
N  j−k,t  j,t j,t , ∀k, i, t, (10)
i−k,t k,t
TCOC = TCOC
OCs and CCs, whereas c̃ refers to the corresponding condition.
j=1 GOC POC δOC
The contingency set is composed of N-1 contingencies, i.e.,
each transmission line is forced to be offline separately in each j,t
where POC is the net load of node j at time slot t for OCs.
contingency. TCk,tPC is the transmission cost of line k at time
j,t j,t j,t
δOC is a binary variable related to POC . δOC = 0 indicates
slot t on PCs. The valid capacity of line k is expressed as that there is power injected into node j at time slot t, which
follows: means that node j will not be charged for TCOC at time slot t.
    j,t
k
Fvalid = min F k , 1 + ρ k fmax
k
, ∀k, (5) δOC = 1 indicates that there are loads extracted from node j
  at time slot t, so node j will be charged for TCOC at time slot
 
k
fmax = max fck,t . (6) t. On PCs, the postage stamp method is adopted to allocate
∀c,t
TCPC [19]. The transmission cost of line k for PCs paid by
For most transmission assets, the valid capacity Fvalid k is i−k,t
node i at time slot t, denoted by TCPC , is expressed below:
k
larger than fmax because the future uncertainties may increase i,t i,t
the maximal power flows, e.g., the load growth in the fol- i−k,t k,t POC δOC
TCPC = TCPC N j,t j,t
. (11)
j=1 POC δOC
lowing several years, the increasing penetration of renew-
able energy, the power transfer caused by transmission asset
For CCs, TCCC must be allocated according to the contri-
maintenance [22] and etc. To consider the capacity reserved
butions of each node [4]: If the consumers at a node increase
for the future uncertainties, a scalar ρ k is introduced. In actual
the power flow during contingencies, they must pay for the
system operations, ρ k can be set by the system operators based
corresponding TCCC . However, if the consumers reduce the
on historical data, and market protocols [1]. The gap between
power flow, they will not be charged. In our previous work [4],
the transmission capacity and the valid capacity is defined
fixed levels of load demands are utilized as exogenous con-
as the invalid capacity, as eq. (4) shows. TCk,t IC is the invalid ditions on CCs, which ignores the load flexibility caused by
transmission cost of line k at time slot t.
DERs. However, because DERs have fast-response capabil-
It is worth mentioning that the power flows of the network
ity at each period, the DER operators can flexibly adjust
can be obtained via SCED, formulated as follows:
 the output of DERs during contingencies, thereby reducing
i Pi,t ,
cG G
min (7) the contingency power flows of transmission assets in the
it power system. Fig. 2 illustrates the effects of DERs on the
 
subject to PG − PNLD
= 0, ∀t, (8) contingency power flows.
i,t i,t
i The capability of increasing or decreasing the DERs’ output
   power depends on DERs’ fast-response capacity. During con-
−F k ≤ GSDFci−k PG
i,t − PNLD
i,t ≤ F k , ∀k, t, c. tingencies, if DERs provide power support, the power flows
i
of the transmission lines may be effectively reduced. This
(9)
grid-friendly process should be rewarded with lower trans-
The SCED model is to minimize the total costs of conven- mission prices. Therefore, TCA for CCs should reflect DERs’
tional centralized generators. PNLD
i,t is the net load of node i at contributions to the change in net loads during contingencies.

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5240 IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO. 5, SEPTEMBER 2018

of DERs at node x to the power system, the TCA scheme is

designed such that the DER operators at node x are charged
x−k,t
for the minimum of the total TCCC , denoted by TCx,t
CC :

x,t

L
x−k,t
TCCC = x,t
minx,t TCCC , (16)
PCC,c̃ ∈XCC,c̃
k=1

Fig. 2. The illustration of the effects of DERs on the contingency power ∗x,t
L
x−k,t
flows. PCC,c̃ = arg min TCCC . (17)
Px,t x,t
CC,c̃ ∈XCC,c̃ k=1

x,t
Hence, one major contribution of this paper is to design XCC,c̃ is the constraint set of Px,t
CC,c̃ , which is formed accord-
∗x,t
a reward mechanism for DERs and to determine the capacity ing to the fast-response capability of DERs. PCC,c̃ is the
with which DERs should respond to contingencies. Suppose optimal net load of node x when TCx,t CC reaches its minimum.
that DERs are located at node x. As defined above, c̃ refers to According to eq. (16) and (17), the system operator can cal-
the contingency condition with maximum power flow on line culate the transmission costs charged for DER operators and
k at time slot t. Because DERs have fast-response capability, determine the fast-response capacity of DERs on CCs.
the GLDF of node x to line k is a function of the net load:
 
x−k,t x−k,t
GCC,c̃ = GCC,c̃ Px,t
CC,c̃ , ∀k, t, (12) IV. O PTIMAL P LANNING M ODEL
In contrast to existing research, the proposed planning
x−k,t
where GCC,c̃ is GLDF of node x to line k at time slot t on model considers the structural TCA. To address planning
condition c̃. Px,t
CC,c̃ is a variable representing the net load of uncertainties, scenario-based stochastic programming is used.
node x at time slot t. Compared with OCs, the power flow Multiple scenarios of wind power, photovoltaic power and
increase on CCs on line k contributed by node x is as follows: load demand are adopted. To focus on the effects of TCA on
x−k,t x−k,t x,t x−k,t x,t the investment behavior of consumers, the planning model
fCC,c̃ = GCC,c̃ PCC,c̃ − GOC POC for DERs located at a single node in the power system is
 x,t
P
x−k,t CC,c̃ x−k,t
established in this section.
= GCC,c̃ − GOC Px,t x−k,t x,t
OC = Gc̃ POC ,
Px,t
OC
(13) A. Objective
x−k,t The objective is to minimize consumers’ annualized opera-
where fCC,c̃ is the power flow increase at time slot t caused tion costs and investment costs.
by node x. Gc̃x−k,t is the equivalent difference of GLDF
between condition c̃ and OCs. min CIDER + CELD , (18)
If the load of node x increases the power flow on line k, N WT
 N PV
 N ESS

the consumers at node x must pay for TCCC . However, if the CIDER = uWT WT
i ICi + i ICi +
uPV PV
i ICi ,
uESS ESS

load of node x leads to a counter flow on line k, alleviating i=1 i=1 i=1
the transmission congestion on CCs, the consumers at node (19)
x−k,t
x should not be charged. Therefore, a binary variable σCC,c̃ NS
 T 
 
determines whether the consumers at node x should be charged CELD = γs cEt + cTC
t,s Pt,s T,
NLD
(20)
for TCk,t
CC : s=1 t=1
⎧  
⎨ 1, f x−k,t × f k,t − f k,t ≥ 0 where uWT PV
i , ui and ui
ESS are the binary variables determining
x−k,t
σCC,c̃ =
CC,c̃  CC,c̃ OC  , ∀k, t. (14) whether to invest in the ith WT, PV and ESS. A value of
⎩ 0, f x−k,t × f k,t − f k,t < 0
CC,c̃ CC,c̃ OC 1 indicates that the DER will be invested in, and 0 indicates
x−k,t
otherwise. T is the time duration. cTC t,s is the transmission
If σCC,c̃ = 1, the consumers must pay for TCk,t CC ; else if price allocated to node x at time slot t in scenario s, composed
x−k,t
σCC,c̃ = 0, the consumers should not be charged for TCk,t CC . of the transmission prices on OCs, CCs and PCs as described
The transmission cost of line k on CCs, paid by node x at time in Section III. In addition, consumers are assumed to be price-
slot t, is expressed as follows: takers in the energy market. Thus, energy prices are predefined
  regardless of the scenarios and DERs’ working conditions.
 x−k,t  x,t x,t x−k,t
Gc̃ POC δCC,c̃ σCC,c̃
TCCCx−k,t
= TCCCk,t
N    , ∀k, t, (15)
j−k,t  j,t j,t j−k,t B. Constraints
j=1 G c̃ P δ σ
OC CC,c̃ CC,c̃
1) The constraint of investment budget:
x−k,t
where TCCC is the transmission cost of line k on CCs paid
x,t
by node x at time slot t, and δCC,c̃ is a binary variable related CIDER ≤ ICmax . (21)
x,t x−k,t
to PCC,c̃ similar to eq. (10). Note that TCCC is a function In constraint (21), the investment costs should be less than
of the output of DERs Px,t CC,c̃ . To measure the contributions the budget.

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WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA 5241

2) The constraint of WT power: Based on the planning strategies, the response-up/-down capa-
WT WT,max
bility of DERs at time t in scenario s can be calculated:
i,t,s ≤ ui Pi,t,s
0 ≤ PWT , ∀i, t, s. (22)
WT PV ESS
3) The constraint of PV power: 
N 
N 
N
DER
RUt,s = WT
RUi,t,s + PV
RUi,t,s + ESS
RUi,t,s , (31)
PV,max
0≤ PPV
i,t,s ≤ uPV
i Pi,t,s , ∀i, t, s. (23) i=1 i=1 i=1
WT PV ESS

N 
N 
N
4) The constraint of the operating and investment variables t,s =
RDDER i,t,s +
RDWT i,t,s +
RDPV i,t,s .
RDESS (32)
of ESSs: i=1 i=1 i=1

0 ≤ αi,t,s
ESS
+ βi,t,s
ESS
≤ uESS
i , ∀i, t, s, (24) In eq. (31) and (32), the total response-up/-down capabilities
can be supported by WTs, PVs and ESSs. In practice, the ESSs
where αi,t,s
ESS , β ESS are binary variables representing the oper-
i,t,s can provide fast-response capacities by quick charging and
ating conditions of ESSs. αi,t,sESS = 1, β ESS = 0 indicates that
i,t,s discharging. In addition, the WTs and PVs are well control-
ESS = 0,
the ESS i is charging at time slot t in scenario s. αi,t,s lable, which are equipped with power electronic devices and
βi,t,s = 1 indicates that ESS i is discharging at time slot t in
ESS advanced control technologies. The response-up capacities can
scenario s. If uESS i = 1, then αi,t,s
ESS = 0, β ESS = 0 indicates
i,t,s
be supported by deviating from the maximum power output
that the ESS i is hanging up at time slot t in scenario s. If status to leave a margin, while the response-down capacities
uESS
i = 0, αi,t,s
ESS and β ESS are forced to 0.
i,t,s
can be provided by wind and solar power curtailment [26].
5) The constraint of the power of ESSs: As illustrated in Fig. 3, the fast-response capabilities of the
WTs and PVs are restricted by the available power at each
ESS ESS,max
0 ≤ PESS
i,t,s,α ≤ αi,t,s Pi,α , ∀i, t, s, (25) period and the capacities of the inverters. For example, the
0≤ PESS ≤ ESS ESS,max
βi,t,s Pi,β , ∀i, t, s. (26) common types of WTs are capable of adjusting the output by
i,t,s,β
0.05-0.25 p.u./s [27]. RU WT,max
i and RU PV,max
i represent the
Constraints (25) and (26) show the power limits for charging maximal response-up capacities of WT i and PV i. RDWT,max i
and discharging. and RDPV,max
i are the maximal response-down capacities of
6) The constraint of stored energy in ESSs: WT i and PV i. Therefore, the response-up/-down capability
  of WTs, PVs and ESSs are expressed as follows:
ESS
Ei,t,s = Ei,t−1,s
ESS
i,t,s,α ηi,α − Pi,t,s,β /ηi,β T,
+ PESS ESS ESS ESS

∀i, t, s, (27) WT
RUi,t,s = min RUiWT,max , uWT WT,max
i Pi,t,s − PWT i,t,s , (33)

ESS
SOCi,min ≤ ESS
Ei,t,s /CiESS ≤ SOCi,max
ESS
, ∀i, t, s, (28) = min RUiPV,max , uPV PV,max
− PPV
i,t,s ,
PV
RUi,t,s i Pi,t,s (34)
ESS
Ei,0,s = Ei,T,s , ∀i, s.
ESS
(29)  
ESS,max ESS Ei,t−1,s − SOCi,min · Ci
ESS ESS ESS
RUi,t,s = ui × min Pi,β
ESS ESS
, ηi,β
Constraint (27) shows the dynamic process of the energy T
stored in the bank of the ESSs. Constraint (28) shows the + PESS
i,t,s,α − Pi,t,s,β ,
ESS
(35)
limit of the stored energy. Constraint (29) shows that the stored 
energy at time slot T is set the same as the initial energy for RDWT
i,t,s = min RDiWT,max , PWT
i,t,s, (36)
the balance of the ESSs [24]. 
RDPV
i,t,s = min RDPV,max
i i,t,s ,
, PPV (37)
7) The constraint of the net load: 
ESS,max SOCi,max · Ci
ESS ESS − E ESS
WT PV i,t−1,s

N 
N RDESS
i,t,s = uESS
i × min Pi,α ,
PNLD = PLD − PWT − PPV ηi,α T
ESS
t,s t,s i,t,s i,t,s
i=1 i=1 − PESS
i,t,s,α + Pi,t,s,β .
ESS
(38)

N ESS 
− −PESS
i,t,s,α + Pi,t,s,β ,
ESS
∀t, s. (30) The fast-response capabilities of WTs and PVs are restricted
i=1 by the inverters and the available power. While the fast-
Eq. (30) shows that the net load is the difference between the response capability of ESSs is restricted by the maximum
load and the output of DERs. In this paper, the load demand power and the stored energy.
is assumed inelastic. Hence, the constraint set of the net load in eq. (16) and (17)
Therefore, objective (18) and constraints (21)–(30) form can be formulated as follows:
the optimal planning model for DERs considering struc- x,t,s  
tural TCA. In this model, the transmission costs allocated to XCC,c̃ = PNLD
t,s − RUt,s , Pt,s + RDt,s
DER NLD DER
, ∀t, s. (39)
consumers are incorporated as transmission prices in eq. (20).
Because the mapping between transmission prices and net
loads is non-analytical and nonlinear, it is not possible to solve
C. Fast-Response Capability this mixed integer nonlinear programming (MINLP) problem
As described in Section III, the nodal net loads on contin- in one step. Therefore, an iterative solution method is adopted
gencies are influenced by the fast-response capability of DERs. to solve the bi-level planning model.

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5242 IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO. 5, SEPTEMBER 2018

Fig. 3. The illustration of grid-connected WT and PV via inverters.

V. S OLUTION M ETHODOLOGY
A. Procedure of the Solution Method
From the analysis above, it is highly complex to solve
the optimal planning model for DERs considering structural
TCA in a centralized manner. Therefore, an iterative solu-
tion method is used to solve the bi-level planning model. The
procedure of the solution method is illustrated in Fig. 4.
1) Initialize the index of iteration w and the parameters in
different scenarios needed by the TCA and planning mod-
els, including conventional/distributed energy resources, load
demands, transmission assets, and energy prices.
2) According to the TCA scheme proposed in Section III,
identify the wth transmission costs of each asset at differ- Fig. 4. The procedure of the iterative solution method.
ent periods in various scenarios. Specifically, allocate the
transmission costs on node x, where DERs are planned.
3) Calculate the transmission prices of node x at time slot t
in scenario s, shown in eq. (40). The transmission prices are
used in the objective of DERs investments, shown in eq. (20).
⎧ 
⎨ m∈{OC,CC,PC} Lk=1 TCmx−k,t,s
, PNLD
t,s  = 0
i,s =
cTC PNLD (40)
⎩ 0, PNLD = 0.
t,s

t,s

4) Optimize the planning model for DERs, considering
structural TCA, formulated in Section IV. In the planning
model, the transmission prices cTC t,s are given as the exogenous
conditions. The (w + 1)st planning results are then acquired.
5) Calculate the (w + 1)st net load based on the updated
planning results. The net load is calculated in eq. (30).
6) Determine whether the (w + 1)st planning results are
identical to the wth planning results. If the present results are
identical to the previous ones, output the optimal results, and
the solution procedure terminates. Otherwise, go to 7).
7) Calculate the fast-response capability of DERs and the
net loads at node x, as shown in (31)-(39). Go to 2).
From an economic point of view, the iteration process can be
described as follows. Initially, consumers purchase electricity
from the bulk power system at high prices without the invest-
ment in DERs. To reduce the electricity and transmission costs,
the consumers invest in some DERs and strategically operate
the DERs. With the help of DERs, on one hand, the elec-
tricity purchased from the bulk power system decreases along
with the consumers’ electricity costs; On the other, the fast-
response capability of DERs can help reduce the peak loads of
the system and relieve the transmission congestion. The ben-
efits on the system level reduce the consumers’ transmission
costs. If the reduced costs are greater than the investment costs,
the consumers will make further investments. Otherwise, the
investment will be suspended.
Fig. 5. Illustration of the iterative oscillation.
B. Convergence Criterion
Because the electricity costs vary with the planning strate-
gies for DERs, the consumer will probably find that the
reductions in electricity costs cannot make up the DER invest-
ments after investing in a DER. Then oscillations may occur
during iterations in a dilemma between two situations: i) low
investment costs but high operation costs; ii) high investment
costs but low operation costs. The marginal DER is denoted
byDERn , shown in Fig. 5.
Considering the nonlinear and non-analytical nature of the
structural TCA model, it is difficult, if not impossible, to guar-
antee the optimality and convergence. Hence, a convergence
criterion is designed as follows:
1) Find the situations where oscillations occur during the
iteration.
2) According to (19), calculate the investment costs based
on the planning strategies in each situation.
3) According to the proposed TCA scheme, update the
transmission prices in each situation and calculate the elec-
tricity costs, shown in (20).
4) Find the situation with the minimum costs of investment
and electricity. Then the iteration terminates. The planning

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WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA 5243

TABLE I
PARAMETER OF DER S

TABLE II
T HE W EIGHTS OF T EN S CENARIOS
Fig. 6. The 3-bus system diagram.

strategy in the situation with minimum costs is selected as the

converged results.

VI. C ASE S TUDIES

The testing environment was a ThinkPad T440p operat-
ing at 2.40 GHz with 8 cores. The program was developed
with MATLAB R2015a. The optimization solver was CPLEX
12.4 [28]. To validate the proposed model and method, a 3-bus
test system and IEEE 118-bus system were simulated. The
real-time prices (RTPs) in Illinois, USA, are used [29]. To
address the uncertainties of load demands and renewable
energy, scenario-based stochastic programming is adopted.
The yearly power curves of wind, photovoltaic and load are
collected from the wind farms, solar panels and substations
in a province in China. Then 10 typical daily scenarios are
generated by K-means clustering. Meanwhile, the weights of
these scenarios can be obtained.
The parameters of DERs are listed in TABLE I. Note that
the fast-response capacities of the inverters [27] are adopted as
the adjustable power of WTs and PVs in 10s, i.e., 0.05 × 10 =
0.5 p.u.
According to typical industry parameters [25], the transmis-
sion cost for all lines is 1 $/h for a 1-MW capacity. The scalar
ρ k for future uncertainties is set to 10% for each line [1].
A. 3-Bus Test System
The 3-bus system is shown in Fig. 6. The reactance of the
three transmission lines is identical. The transmission capac-
ities of lines 1-2, 1-3 and 2-3 are 30 MW, 30 MW and
26 MW. The load at node 3 is 80 MW. The maximum power
flows during the yearly operation on lines 1-2, 1-3 and 2-3 are
26 MW, 26 MW and 18.2 MW. The consumers at node 2 plan
to invest in DERs, including 3 WTs, 2 PVs and 1 ESS. The
annualized budget is $ 350,000. The typical wind and pho-
tovoltaic power curves of the sum of 3 WTs and 2 PVs are
shown in Fig. 7.
Based on the clustering results, the weights of 10 scenarios
are listed in TABLE II.
Fig. 7. The typical wind and photovoltaic power curves of 3 WTs and 2 PVs.
Fig. 8. Cost structures of planning strategies with/without DER investments.
1) Optimal Planning Strategy at Node 2: After 4 iterations,
the planning strategies are optimized and the computational
time is 13 min 14 s, which is acceptable for planning.
The planning strategy is to invest in 2 WTs, 1 PV and
1 ESS. The cost structures of the optimal planning are shown
in Fig. 8. The cost analysis indicates that after investing in
DERs, the annualized costs of electricity energy and trans-
mission are reduced by 19.93% and 16.25%, respectively. The
annualized cost saving is $415,000, larger than the total annu-
alized investment cost, i.e., $330,000. Therefore, it is beneficial
for consumers at node 2 to invest in DERs.
As one can observe, the consumers are economically driven
to invest in DERs by the cost savings from energy costs and
transmission costs. It is worth mentioning that it is imperative
to consider transmission costs in the planning model. Because
of the economic incentive of transmission costs, the consumers
can be further encouraged to invest in more DERs.
2) Stochastic Operation Simulation: The expected power
curves of the invested WTs, PV, ESS and the net load demands
at node 2 are shown in Fig. 9. Because the operational costs of

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5244
Fig. 9. Expected power curves of the invested WTs, PV, ESS and the net
loads.
TABLE III
T HE T RANSMISSION C OSTS W ITH /W ITHOUT DER S (U NIT: M ILLION $)
WTs and PVs are 0, the wind and photovoltaic power are fully
accommodated in the operation simulation. The ESS charges
during valley hours when the RTPs are low and discharges dur-
ing peak hours when the RTPs are high. By means of arbitrage,
the ESS can maximize its value by shifting loads. Because of
DERs’ generation, the net load demands at node 2 are high at
valley hours from 2:00 to 5:00, and low at peak hours from
15:00 to 18:00.
3) Transmission Cost Allocation: After investing in DERs,
the transmission costs allocated to node 2 will be effectively
reduced. The expected transmission costs with/without DERs
at node 2 are compared in TABLE III.
Three valid components of transmission costs are effec-
tively reduced after investing in DERs. The invested DERs
can decrease the net loads at node 2 and the power flows
on transmission lines, thereby lowering the transmission costs.
Notably, according to the proposed TCA scheme, the transmis-
sion costs on CCs can be further reduced with the fast-response
capability of DERs, decreased by 37.23%. The transmission
prices and the valid components are shown in Fig. 10.
As Fig. 10 shows, the transmission prices are negatively
correlated with the net load demands, especially high from
15:00 to 18:00, while low from 2:00 to 5:00. This is because
higher load demands lead to higher utilization of transmission
assets, which reasonably results in higher transmission prices
according to increasing marginal costs.
The transmission costs are composed of three valid com-
ponents, TCOC , TCCC and TCPC . The transmission prices are
related to the three components according to eq. (40).
Transmission prices on OC are positively correlated with
the actual net loads because TCOC reflects the actual usage
of the operating transmission capacity. Transmission prices
on CC are negatively correlated with the fast response-up
capacities of DERs, shown as the difference between the
“Net load” and the “Net load-RU” curve. As designed in the
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IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO. 5, SEPTEMBER 2018
Fig. 10. Expected transmission prices and the valid components.
TABLE IV
C OST S TRUCTURES OF THE P LANNING S TRATEGIES U SING F OUR
M ETHODS (U NIT: M ILLION $)
TCA scheme, the higher the fast response capability is, the
lower the transmission prices should be. If DERs can pro-
vide upward fast-response capacities at node 2, TCCC can be
effectively reduced.
Transmission prices on PC have a negative relationship with
the actual net loads. Because higher load leads to a higher
level of transmission asset utilization, the transmission costs
per unit energy are reduced.
4) Comparison With Conventional Methods: To verify the
effectiveness of the proposed TCA scheme and the optimal
planning strategy model, the simulation results are com-
pared using four methods: (i) M1, wherein DERs are planned
without considering the effects of TCA. Transmission costs
are allocated for settlement with the postage stamp method;
(ii) M2, wherein DERs are planned without considering the
effects of TCA. Transmission costs are allocated for settle-
ment with the TCA method from [4]. This method ignores the
effects of DERs’ fast-response capability on TCA; (iii) M3,
wherein DERs are planned without considering the effects of
TCA. Transmission costs are allocated for settlement with the
proposed TCA method; (iv) M4, wherein DERs are planned
considering the proposed TCA method. Notably, the transmis-
sion costs are not considered in the existing planning models.
Thus, in M1, M2 and M3, DERs are strategically planned with-
out considering the effects of TCA; i.e., transmission costs are
ignored in the objective (20).
In M1, M2 and M3, 1 WT, 1 PV and 1 ESS are optimized
to be invested in. The transmission prices at node 2 using four
methods are compared in Fig. 11. The cost structures of the
planning strategies are shown in TABLE IV.
In M1, because invalid costs are included in the total trans-
mission costs, the transmission prices are significantly higher
than those in other methods.
WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA
Fig. 11. Expected transmission prices at node 2 by M1, M2, M3 and M4.
Compare the results in M2 with those in M3, and one
can observe that the transmission prices can further decrease
by considering the fast-response capability of DERs, because
DERs are rewarded for contributions during contingencies.
Thus, the consumers can benefit from the total cost savings
under the proposed TCA scheme.
Compare the results in M3 with those in M4, and one can
observe that the consumers will invest in one more WT in
M4 by considering the effects of TCA. The transmission prices
in M4 are even lower than those in M3, which further incen-
tivizes the consumers to make investments. In addition, by
considering TCA in the DERs planning, the consumers can
effectively reduce the total costs, as shown in TABLE IV. The
comparisons demonstrate that it is helpful to develop DERs
by incorporating transmission cost allocation in the planning
model. Hence, with the increasing penetration of distributed
energy, the peak loads of the system can be reduced, and
transmission congestion can be effectively relieved.
5) Crossing-Impact of Planning Strategy At Different
Nodes: Confronted with high electricity prices, the consumers
at node 2 will strategically invest in DERs to reduce the energy
and transmission costs. However, after investing in DERs at
node 2, more transmission costs will be allocated to node 3,
thus economically encouraging the consumers at node 3 to
make investments. The influences of DER investments on the
planning strategies at node 3 are investigated as an example.
The transmission prices at node 3 are compared in
Fig. 12 before and after DER investments at node 2. From
the comparison of transmission prices, the investment of the
consumers at node 2 can influence the transmission prices at
other nodes, i.e., node 3 in this case study. Given an amount of
the total transmission costs, if the transmission costs at node 2
are reduced by investing in DERs, the transmission costs and
the prices at node 3 will increase.
Suppose there are 3 candidate ESSs to be planned by the
consumers at node 3. The capacity of each ESS is 15 MWh
with 2.5 MW maximal charging/discharging power, and the
single investment cost is 85,000 $. Given the present trans-
mission prices, the planning strategies and cost structures can
be optimized based on the proposed planning model, as shown
in TABLE V.
With the increase of the transmission prices at node 3, the
planning strategies of consumers at node 3 will change as well.
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5245
Fig. 12. Expected transmission prices at node 3 before and after DER
investments at node 2.
TABLE V
P LANNING S TRATEGIES AND C OST S TRUCTURES AT N ODE 3
Before DER investments at node 2, the consumers at node 3
will not invest in any ESS because the transmission prices are
low. However, after DER investments at node 2, the transmis-
sion prices get much higher, which incentivizes the consumers
to make investments to reduce the electricity costs. Compared
with the results before and after ESS investment at node 3, the
transmission costs and energy costs can be effectively reduced
after investing in 3 ESSs.
The simulation demonstrates that the planning strategies at
one node have impacts on the decision making at other nodes.
The proposed scheme is able to make consumers at different
nodes to invest in DERs in an iterated game, which promotes
the development of distributed energy. It is worth mentioning
that the planning strategies of the consumers at node 2 can
be influenced after 3 ESSs are invested in at node 3. Given
the updated transmission prices at node 2, the planning model
can be optimized to acquire the strategies in the next iteration,
which remains 2 WTs, 1 PV and 1 ESS. In this case, the global
converged results are to invest in 2 WTs, 1 PV and 1 ESS at
node 2 while 3 ESSs at node 3.
However, the global optimality and convergence cannot be
always guaranteed as described in Section VI. Because the
TCA results are determined by the planning and scheduling
of DERs at each node, this problem can be formulated as
a market equilibrium model. The general solution algorithm
to the market equilibrium needs further research in the future.
6) Sensitivity Analysis: The investment budget is the sum
of intended expenditures associated with labor, materials and
other related expenses. To verify the effects of investment bud-
get on the planning strategies, the sensitivity analysis on the
investment budget is conducted in this subsection.
5246
Fig. 13. Sensitivity analysis about the planning strategy and cost structure.
Fig. 14. The typical wind and photovoltaic power curves of 5 WTs and
4 PVs.
TABLE VI
T HE W EIGHTS OF T EN S CENARIOS
The planning strategies and the cost structures are shown
in Fig. 13 with the increase of investment budgets. With the
increase of investment budgets, five planning strategies are
optimally acquired. The investment costs increase with more
DERs invested in, while more DERs contribute to the greater
reduction of the transmission and energy costs. Hence, the total
costs decrease with the increase of budgets. When the budget
is sufficient, the consumers will at most invest in 1 ESS, 2 PVs
and 2 WTs.
B. IEEE 118-Bus System
The IEEE 118-bus system is used to further validate the
effectiveness and robustness of the proposed scheme and
model. The consumers at node 54 plan to invest in DERs,
including 5 WTs, 4 PVs and 3 ESSs. The annualized bud-
get is $ 800,000. The yearly power curves are collected from
the wind farms, solar panels and substations in a province
in China.
The typical wind and photovoltaic power curves of the sum
of 5 WTs and 4 PVs are shown in Fig. 14.
Based on the clustering results, the weights of 10 scenarios
are listed in TABLE VI.
After 6 iterations, the computational time is 1 h 29 min
34 s, which is acceptable for planning. The planning strategy
is to invest in 4 WTs, 2 PVs and 3 ESSs.
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IEEE TRANSACTIONS ON SMART GRID, VOL. 9, NO. 5, SEPTEMBER 2018
Fig. 15. Expected transmission prices and the valid components at node 54.
Fig. 16. Expected power curves of the invested WTs, PV, ESS and the net
loads at node 54.
TABLE VII
C OST S TRUCTURES OF THE P LANNING S TRATEGIES U SING F OUR
M ETHODS (U NIT: M ILLION $)
The expected transmission prices and valid components
at node 54 are shown in Fig. 15. In the simulation results,
the average transmission prices for OC, CC and PC are
1.64 $/MWh, 1.61 $/MWh and 1.08 $/MWh, respectively. The
expected power curves of the invested WTs, PV, ESS and
the net load demands at node 54 are shown in Fig. 16. As
one can observe, because of wind and photovoltaic generation
and the arbitrage of ESSs, the net load demands are high at
valley hours from 2:00 to 5:00, and low at peak hours from
11:00 to 18:00.
To demonstrate the effectiveness of the proposed scheme,
the cost structures of the planning strategies using four
methods are shown in TABLE VII.
In M1, M2 and M3, only 1 WT, 1 PV and 3 ESSs are
optimized to be invested in without considering the effects of
TCA on DER planning. However, by incorporating TCA into
the planning model, more DERs including 2 WTs, 1 PV will be
invested in. The transmission prices in M4 are lower than those
WANG et al.: OPTIMAL PLANNING STRATEGY FOR DERs CONSIDERING STRUCTURAL TCA
Fig. 17. Average transmission prices before and after DER investments at
node 54.
in other methods, which further incentivizes the consumers to
make investments. Hence, more DERs can be invested in, and
higher distributed energy penetration can be achieved. With the
increasing penetration of distributed energy, the peak loads of
the system can be reduced, and transmission congestion can
be effectively relieved.
After investing in DERs at node 54, the transmission prices
at other nodes will be influenced. The average transmission
prices at each node are compared in Fig. 17 before and after
investing DERs at node 54. In Fig. 17, the node indices have
been sorted from the maximum to the minimum transmission
prices before investment, and the generation nodes are omitted
because the allocated transmission costs are 0.
From the simulation results, given an amount of the total
transmission costs, if the transmission costs at node 54 are
reduced by investing in DERs, the transmission costs and the
prices at other nodes will change. The increase of transmission
prices at some nodes will further incentivize the consumers
to invest in DERs. The market equilibrium problem needs
a future study, in which the consumers at different nodes make
investments in a simultaneous game.
VII. C ONCLUSION
In this paper, an optimal planning strategy and a model for
DERs are formulated by considering structural TCA. In the
proposed TCA scheme, the effects of DERs are considered. If
the fast-response capability of DERs can be fully used to pro-
vide emergent power support for the bulk power system, the
peak loads of the system can be reduced, and the congestion of
transmission assets can be alleviated. This grid-friendly pro-
cess provides significant benefits for the power system, and
thereby the DER operators will be rewarded with a reason-
ably low transmission price. By strategically planning DERs
by considering TCA, on the one hand, consumers can reduce
the costs of electricity and transmission and maximize the
long-term revenue. On the other hand, system benefits can be
fully achieved, thus allowing the power system to operate more
economically and securely. Because the relationships between
transmission prices and planning strategies are complex and
non-analytical, an algorithm is presented to iteratively solve
the bi-level planning problem. Case studies based on a 3-bus
test system and the IEEE 118-bus system with various DERs
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5247
verify the outperformance of the proposed scheme and model.
By optimizing the proposed model, consumers can rationally
invest in and operate DERs to minimize the total costs. We
hope that the proposed scheme and method will provide new
insights allowing the development of DERs.
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Clean Energy, vol. 1, no. 2, pp. 177–185, 2013. Beijing, China, in 2013, where he is currently
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charge scheme as compared with current allocation methods,” IEEE include generation scheduling optimization, demand
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Melbourne, VIC, Australia, Tech. Rep. ABN 94072010327, 2013. in engineering from Tsinghua University, Beijing,
[Online]. Available: http://www.aemo.com.au/Electricity/Planning/ China, in 1989, where he is currently a Professor.
Integrating-Renewable-Energy His research interests include electricity markets,
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Jianxiao Wang (S’14) received the B.S. degree Chongqing Kang (M’01–SM’07–F’17) received
in electrical engineering from Tsinghua University, the Ph.D. degree in engineering from
Beijing, China, in 2014, where he is currently pur- Tsinghua University, Beijing, China, in 1997,
suing the Ph.D. degree in electrical engineering. He where he is currently a Professor. His research
is also a visiting student researcher with Stanford interests include power system planning, power
University, CA, USA. His research interests include system operation, renewable energy, low carbon
power system operation and planning, and electricity electricity technology, and load forecasting.
market.

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