Distributed energy resources (DERs) provide various values to electric power systems. One of the challenges DER introduce is to determine what... Show moreDistributed energy resources (DERs) provide various values to electric power systems. One of the challenges DER introduce is to determine what is the value of DER contributions to various sectors in distributed power systems. Analyzing such challenges require understanding the inherent variability of DERs and the uncertainty in hourly load. The value of DER is also a function of network conditions and its adaptability for responding to DERs and loading variations.The uncertain conditions in the planning and the operation of electric power systems make the DER valuation a complicated task which requires sophisticated analytical methods. DER valuation will be a critical issue for the power market operation as we try to determine the most economical and reliable generation portfolio to maximize social welfare. In the DER valuation, there is a stage in which the DER candidates are not located or sized properly, and the utility will provide an approximated solution in order to value DERs. In this thesis, DER valuation has been addressed initially using a stochastic analysis in order to determine a range of values. Once the range is determined, we calculate the economic viability of the values within the range. If DER can reduce the upgrade cost for delivering the load in a distribution system, then the proposed size and the location of DER will have viability. In addition, with the proposed method, a utility can decide on the cost and the methodology of mitigating contingencies by DERs and allocate that cost to the amount of DER for valuation. This is considered as the second phase of this valuation method.As the final phase of this thesis, different types of financial contracts are considered as part of valuation which can introduce additional merits to the utility operation. Recently, the concept of real options has been considered in electric power system projects. The real option analyses (ROA) concept has proven to be viable because of the variability in DERs and changes in real-time load as discussed in this dissertation. The DER valuation is highly case sensitive, and many special factors may have an effect on its value. In this thesis, the factors with the highest impact have been considered, however, there could be additional factors with lower impacts which usually depend on the utility planning and operation. The essence of such factors is further discussed as part of the future work are briefly explained at the end of the thesis. Show less
