Tariff rationalization for reactive power and harmonics regulation in low voltage distribution networks

The harmonics and reactive power have severe consequences on the power electronics-enabled distribution networks. Imposing a penalty to a consumer for violation of limits and providing an incentive for utility-related problems promote good practices. Therefore, we need to reframe the prevailing tariff structure to improve the power quality (PQ) of the low voltage (LV) distribution networks. Nevertheless, there is no unique standard tariff structure in practice for the PQ regulation. This paper presents a penalty/incentive-based tariff scheme for LV consumers to regulate their reactive power and harmonic injection within limits. The pricing is arrived at, considering the techno-economic aspects of excessive reactive power consumption and harmonic pollution. Unlike empirical approaches in the literature, the pricing scheme is more realistic owing to real-world factors like energy losses in the line due to reactive and harmonic current, capital investment on the capacitor bank, and active harmonic filter. The proposed penalty/incentive scheme is validated on an LV radial distribution network with diverse loading conditions. From the results, the proposed tariff scheme is found to be more comprehensive, realistic, and regulatory as it appropriately penalizes/incentivizes both single-phase and three-phase consumers according to their reactive and harmonic profile, with a time resolution suitable for capturing consumer and grid PQ phenomena.