Integration of decentralized generators with the electric power grid

Abstract

This report develops a new methodology for studying the economic interaction of customer-owned electrical generators with the central electric power grid. The purpose of the report is to study the reciprocal effects of the operation and expansion plans of the utility, and the resulting price of electricity, and the demand patterns and expansion plans of customers. The system is modeled in an open-loop feedback mode that allows both the utility and the customers to update their plans and expectations for the next time period based on the other's actions in the current time period and based on any new information such as the current price of oil. The utility and the customers solve similar operation and expansion problems, except that each has control over different variables. In addition, each may have different expectations about the future. A complete methodology encompassing these ideas is developed and implemented.