538
1, FEBRUARY 2004
Distribution Network Configuration for
Minimum Energy Supply Cost
Miguel Arias-Albornoz, Senior Member, IEEE, and Hernán Sanhueza-Hardy
Abstract—This paper describes a model for the economic op-
eration of primary distribution networks fed from several substa-
tions, where the energy purchase prices are different. Several as-
pects involved in the model formulation are discussed. An example
is shown to illustrate the difference between a network operation
based on a minimum loss criterion and the operation based on a
minimum energy cost criterion.
Index Terms—Distribution systems, feeder reconfiguration, op-
timization techniques.
I. INTRODUCTION
I N a distribution network, two voltage levels can be identi-
fied: the primary distribution network (which is the objec-
tive of this paper), and the secondary distribution network or low
voltage network. To assure the service continuity at the primary
network, two or more main feeders covering the same service
area are usually considered to make possible a partial or total
load transfer. In addition, to improve the network operation and
the consumers’ energy quality, control devices are incorporated,
such as tap changer transformers, voltage regulators, capacitor
banks, etc.
The operating conditions of a distribution network depend on
many factors. Several models have been proposed to assess the
influence of a number of operation variables, usually assuming a
single feeder. Computer programs are used to study topics such
as power flow, reactive power control, and feeder reconfigura-
tions, seeking to improve the distribution network performance.
Nowadays, the optimal operation of a distribution network
has become an engineering challenge. The main reason of
applying optimization techniques is to minimize costs [1].
By using a phase-stage decomposition technique, an overall
optimization procedure has been proposed, taking into account
network control devices, load behavior, and economic factors
[2]. Also, a combined method for the determination of the
overall optimal operating condition of any type of distribution
system has been presented [3]. It is based on the minimization
of losses by network reconfiguration and reactive power con-
trol, and optimization of the protective scheme of the network.
However, it is supposed that the distribution network is fed by
only one substation.
Manuscript received March 12, 2003. This work was supported in part by
Fondecyt Project 1980034, and in part by DICYT—Universidad de Santiago de
Chile.
The authors are with the Department of Electrical Engineering, Universidad
de Santiago de Chile, Santiago 10233, Chile (e-mail: m-arias@lauca.usach.cl;
hsanhueza@lauca.usach.cl).
Digital Object Identifier 10.1109/TPWRS.2003.820697
0885-8950/04$20.00 © 2004 IEEE
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 19, NO.
From the optimization point of view, the reconfiguration tech-
nique has mainly been used for loss reduction using different
techniques [4]–[7]. On the other hand, from the service restora-
tion point of view, the reconfiguration allows to relocate loads
by using an appropriate sequence of switching operations, while
operating constrains are taken into account [8], [9].
In some countries, as in Chile [10], electric utilities are under
a legal regulation frame, which fixes the energy prices at the
main nodes of the transmission network. It also fixes the en-
ergy price at the final consumer through the “distribution ag-
gregated value” and taking as a reference a distribution model
optimally managed. Therefore, in addition to supplying good
quality energy, the utilities should develop important efforts to
reduce costs and obtain a maximum income. It means that a very
important issue is to reduce losses and energy buying.
In this paper, a model is proposed to include the economic
effect of different supply energy prices using different feeder
configurations during the operation of distribution networks. To
this end, the paper has been ordered according to the following
sections.
In Section II, the main aspects of the Chilean rate structure
are shown. In Section III, an optimization model for distribu-
tion networks is proposed, which allows the energy cost to be
included in the objective function. Finally, in Section IV, a basic
example is presented to illustrate the influence of the energy cost
in the optimal feeder configuration.
II. RATE STRUCTURE
The basis of Chilean rate structure takes into account the
power and energy prices at the main substations of the transmis-
sion network. Since, in practice, most of the distribution utili-
ties buy energy from these substations, usually located far away
from the load centers, the supply cost is determined by consid-
ering the following charges:
• Transportation charge: It takes into account the losses be-
tween the main substations and the distribution network
feeding points;
• Transformation charge: It takes into account the voltage
levels used to interconnect the main substations and the
distribution network feeding points.
In addition, if a given distribution system is fed by two or
more substations, the energy cost is billed independently. The
distribution utilities have the following options to buy energy
from a bulk system: a) on a maximum demand basis, b) on a
take-and-pay basis for a given quantity of power. In each case,
there are legal regulations to determine the price incident fac-
tors, such as maximum peak load, power factor during the peak
ARIAS-ALBORNOZ AND SANHUEZA-HARDY: DISTRIBUTION NETWORK CONFIGURATION
load, etc. As a final result of these rate regulations, power and
energy prices are different at each substation feeding a given
distribution network.
From now on, to simplify the analysis without loosing gener-
ality, only the energy price in a given substation (S/Ei) will be
considered, according to the following equation:
(1)
where
energy price at substation S/Ei (in dollars per
megawatt-hour);
energy supplied to S/Ei from a main node (in
megawatt-hours);
transportation and transformation charges at S/Ei (in
per unit per megawatt-hours);
energy price at the main node (in dollars per megawatt-
hour).
III. ECONOMIC OPERATION MODEL
Normally, it is understood that a distribution network is op-
erating at optimal conditions when it presents minimum losses,
minimum voltage deviation at the consumer’s feeding point, and
maximum reliability. However, when a distribution network is
fed by two or more substations, the energy cost at each one of
them must be considered for an economic operation.
From the energy cost point of view, the problem can be stated
as follows: for a primary distribution network fed by several
substations from a bulk system, it is required to determine the
power quantity that each substation should deliver to the net-
work during a given time interval in order to minimize the total
energy cost, while maintaining the service quality and relia-
bility.
If the network losses were zero, the solution for the above
stated problem would be immediate: each substation should be
utilized in a sequence according to the energy cost, starting from
the lowest one. However, in a real case, losses must be taken into
account, and a special procedure must be developed to obtain a
solution which minimizes the total energy buying cost.
In a given substation, the demand has two components: the
consumer’s loads and the feeder losses. The total cost supply
to the load of the distribution systems during a time
interval T, will be given by the following equation:
(2)
where
k is the number of loads at feeder “i”;
power of load k, at a time t;
i is the number of substation feeders.
By assuming constant loads during the time interval T, or al-
ternatively, by considering an average power of each load k
during the T interval, (2) can be written as follows:
(3)
539
On the other hand, if the losses at each feeder are known,
the cost of energy losses can be expressed as
(4)
Therefore, from (3) and (4), the total energy cost of the entire
network will be given by the following equation:
(5)
Alternatively, the total energy cost can also be calculated from
the total demand at each substation, as follows:
(6)
where
average power at a feeding substation S/Ei.
In practice, it should be noted that (5) and (6) can give dif-
ferent results due to energy robbery, not taken into account in
(5). Therefore, (6) is more convenient for cost evaluation pur-
poses.
By taking into consideration the network operating restric-
tions, the operation optimization problem can be formulated as
follows:
min (7)
Subject to (8)
(9)
where (8) corresponds to the power flow equations for the dis-
tribution network, and (9) takes into account the practical oper-
ation limits. In addition, restrictions on the topological structure
of the network must be considered.
The solution of this optimization problem can be obtained
according to the following steps:
• determine the network configuration for minimum total
energy supply cost;
• utilize the network control devices to improve operation
conditions.
IV. ILLUSTRATIVE EXAMPLE
This example illustrates the economic effect of different
feeder configurations when different supply energy prices
are considered. Fig. 1 shows an elementary distribution
network fed by two substations, the scheduled bus loads
are shown in Table I. The feeder has a uniform impedance
., on bases 10 MVA and 12 kV.
The energy prices at each substation are
If the radial condition is imposed on the topological structure
of the network, four schemes are possible. The best one must
be determined according to (7) [i.e., the minimum total energy
cost configuration]. A 24-h period will be considered.
540 IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 19, NO. 1, FEBRUARY 2004

4 1 2 3 5 TABLE II
S2 S3 S4 SUBSTATION POWER DELIVERY AND LOSSES FOR CONFIGURATION CS
S1
S/E1 0 + j0 [MVA]
S/E1 S/E2 S/E2 13.689 + j 9.398 [MVA]
S – total 13.689 + j 9.398 [MVA]
Losses 3.291 + j 4.701 [MVA]
Sc1 Sc2 Sc3

TABLE III
SUBSTATION POWER DELIVERY AND LOSSES FOR CONFIGURATION CS
Fig. 1. Example of a distribution network.

4 1 2 3 5 S/E1 3.962 + j 2.731 [MVA]

S1 S2 S3 S4 S/E2 7.077 + j 2.881 [MVA]
S – total 11.039 + j 5.613 [MVA]
S/E1 S/E2 Losses 0.639 + j 0.913 [MVA]

TABLE IV
Sc1 Sc2 Sc3
SUBSTATION POWER DELIVERY AND LOSSES FOR CONFIGURATION CS

Fig. 2. Configuration CS : S open. S/E1 6.934 + j 4.263 [MVA]

S/E2 4.133 + j 1.390 [MVA]
4 1 2 3 5 S – total 11.067 + j 5.653 [MVA]
S1 S2 S3 S4 Losses 0.667 + j 0.953 [MVA]

S/E1 S/E2 TABLE V

SUBSTATION POWER DELIVERY AND LOSSES FOR CONFIGURATION CS

Sc1 Sc2 Sc3 S/E1 13.145 + j 8.621 [MVA]

S/E2 0 + j 0 [MVA]
Fig. 3. Configuration CS : S open. S – total 13.145 + j 8.621 [MVA]
Losses 2.747 + j 3.924 [MVA]
4 1 2 3 5
S1 S2 S3 S4
A. Cost Evaluation of the Different Configurations

S/E1 S/E2
1) Configuration :
open
Sc1 Sc2 Sc3 closed
Fig. 4. Configuration CS : S open. Partial costs

4 1 2 3 5
S1 S2 S3 S4

S/E1 S/E2
Total cost
Sc1 Sc2 Sc3

Fig. 5. Configuration CS : S open. 2) Configuration :

TABLE I open
BUS LOADS
closed
Bus Active Power [MW] Reactive Power [MVAR]
1 3.8 2.5 Partial costs
2 2.6 1.0
3 4.0 1.2

Also, the minimum energy cost criterion will be compared

with the minimum loss criterion. The four different possibilities
to feed the loads will be denoted by , , , and Total cost
(Tables II–V), according to the open position of sectionalizing
circuit breakers , , , and (Figs. 2–5).
ARIAS-ALBORNOZ AND SANHUEZA-HARDY: DISTRIBUTION NETWORK CONFIGURATION 541

TABLE VI
SUMMARY OF RESULTS FOR DIFFERENT CONFIGURATIONS

Configurations P + j Q at each S/E Losses at each S/E Total cost, losses not Total losses Total cost, losses
[MVA] [MVA] included (103) $ [MVA] included (103) $
CS1: S/E1 0+j0 0+j0 2870.4 3.291 3778.16
13.689 + j 9.398 3.291 + j 4.701
S/E2
CS2: S/E1 3.962 + j 2.731 0.162 + j 0.231 2852.16 0.639 3027.75
S/E2 7.077 + j 2.881 0.477 + j 0.681
CS3: S/E1 6.934 + j 4.263 0.534 + j 0.763 2839.68 0.667 3021.21
S/E2 4.133 + j 1.390 0.133 + j 0.190
CS4: S/E1 13.145 + j 8.621 2.747 + j 3.924 2820.48 2.747 3564.92
S/E2 0+j0 0+j0

3) Configuration : It represents the most economical alternative to feed the

loads.
open
closed It should be noted that in each configuration previously con-
sidered, voltage regulation problems might arise. Thus, some of
Partial costs the configurations could require additional control actions, such
as reactive power injection.

V. CONCLUSION
An overall economic optimization model that minimizes the
energy buying cost in distribution networks has been proposed.
Total cost
In this model, the reconfiguration technique has been consid-
ered as a means to get an economical load distribution between
feeding substations. By considering the economic topological
4) Configuration : structure, other parameters such as voltage quality and protec-
tive schemes can be included to improve the network operating
open conditions.
closed To illustrate the difference between the network operation
based on a minimum loss criterion and the operation based on
Partial costs a minimum energy cost criterion, a basic example has been pre-
sented.
It can be foreseen that in real cases, the topological struc-
ture selection of a primary distribution network on a minimum
energy cost basis will be a powerful tool to analyze its optimal
operation when it is fed by several substations with different en-
Total cost ergy buying costs.

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IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 19, NO. 1, FEBRUARY 2004
Miguel Arias-Albornoz (SM’01) received the Dipl.
Ing. degree from the State Technical University of
Chile, Santiago, Chile, in 1980, and the M.Sc. and
Ph.D. degrees in electrical engineering from the
Federal University of Rio de Janeiro, Rio de Janeiro,
Brazil, in 1987 and 1990, respectively.
Currently, he is a Professor with the Department of
Electrical Engineering at the University of Santiago
of Chile, Santiago, Chile, where he has been since
1980. His main research areas of interests are anal-
ysis, operation, and control of electric power and dis-
tribution systems.
Hernán Sanhueza-Hardy received the Dipl. Ing. de-
gree from the State Technical University of Chile,
Santiago, Chile, in 1961, and the M.E. degree from
the University of Toronto, Toronto, ON, Canada, in
1969.
Currently, he is Full Professor in the Department of
Electrical Engineering at the University of Santiago
of Chile, Santiago, Chile. His research interests are
power systems analysis and distribution power sys-
tems.