Risk-based method for cost-effective reinvestments in distribution networks

In deregulated power markets, electricity utilities are now facing new challenges concerning revenue cap regulations, including quality based incentives. When planning the network every grid investment should contribute to minimising the total costs related to the investment within given safety and environmental requirements. This paper describes a method used for planning the time of replacement for network components. By using the method, the utility considers both qualitative and economic criteria that have to be taken into account when evaluating different solutions. The paper also describes experience from a Norwegian utility using the method when planning renewal of distribution substations