Smart Network Pricing Based on Long Run Incremental Cost Pricing Model

Upcoming smart grid environment can offer innovative mechanisms for efficient network management, to relieve the network presently reeling under congestion. A smart network pricing mechanism has been proposed in this paper, to provide effective network pricing signal to the users for network congestion. Considering that future smart meters could measure user's coincident peak demand, the user is offered a coincidence factor (CF) based smart pricing signal, in a Long Run Incremental Cost (LRIC) pricing framework. The proposed approach is applied on 22-bus practical Indian reference network. Different category customers connected at the same node face different network charges, based on their coincident demand. The results encourage users to modify their consumption pattern, and reduce their coincidence to network peaks.