Coincident demand based Smart Long Run Incremental Cost pricing model

Impending Smart Grid environment can offer innovative solutions to alleviate network congestion through efficient network management. This paper proposes a coincident demand based Smart Long Run Incremental Cost (LRIC) pricing mechanism to provide efficient pricing signal to users for mitigating network congestion. Considering that future smart meters would measure user´s coincident peak demand, the user is offered a coincident demand based Smart Pricing signal in a LRIC pricing framework. The proposed approach is applied on 22-bus practical Indian reference network. Users connected at the various nodes face network charges based on their coincident demand to each upstream asset. The results encourage users to modify their consumption pattern, and reduce their coincidence to network peak usage.