Risk-based switch placement in electric distribution network in the presence of performance-based regulation

A Reward and Penalty Scheme (RPS) is generally used for setting up service quality and it will bring about financial benefts for distribution companies due to customer reliability and the resulting demand. In this paper, an algorithm was presented for the optimal switch number and placement in distribution networks in the presence of RPS. The main objective of this paper is to improve the reliability and minimize the costs of Sectionalizing Switches (SS) and Tie Switches (TS) for a given regulatory period considering the acceptable financial risk. In this algorithm, uncertainty in the reliability appears as a financial risk. A genetic algorithm was adopted to solve the optimization problem. The numbers and locations of SS and TS were determined by considering the financial incentives of RPS, capital investment and annual operation, and maintenance costs. The performance of the proposed approach was assessed and illustrated within a real distribution network. The results showed the efficiency of the proposed algorithm.