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In the context of a deregulated electricity market, this paper presents a new method for the distribution of electrical losses in distribution systems with local generators, incorporating variations in consumer power factor. Additionally, the paper examines how local generators may gain the utmost possible advantage from their contributions to system performance enhancement. The proposed approach initially analyzes dynamic changes in active and reactive power flow caused by a change in consumer power factor, followed by a loss allocation mechanism. This method is developed based on Kirchhoff’s law and the natural decomposition of injected bundled power flow at a bus. To completely eliminate cross-subsidies, the proposed mechanism follows a two-stage power flow: first, consumer-controlled power flows, and second, determining variations in power flow as compared to the first stage due to interactions with local generators. Consumer load modeling is being considered to improve the proposed method’s adaptability and efficiency across different distribution systems. The effectiveness of the proposed method is validated through testing on 30-bus and 69-bus distribution systems, and the results obtained are compared with those of other methods found in the literature. [ABSTRACT FROM AUTHOR]

This study presents a new method for allocation of network losses to distributed generations (DGs) and consumers connected to radial distribution networks in context of liberalised electricity market. The study intends to deal with three aspects, namely, issue of non‐linear relation between power flow and losses, change in network losses because of voltage variation and contribution of DG to the network loss. The proposed method is a branch‐oriented approach based on tracing the real and reactive power of DGs and loads. It establishes a direct relationship between sending and receiving node voltages and apparent power available at the receiving node of a branch. It allocates the losses without any assumptions and approximations by employing backward sweep network reduction technique. The proposed method is simple and effective; and requires only the power flow solution to allocate the losses to DGs and loads. Pro rata method, which is based on the power rating of generators and consumers, is revisited and modified according to branch oriented approach. To show the effectiveness of the proposed method, it has been tested on two test networks, that is, 28‐ and 33‐node test networks. The obtained results are presented, discussed and compared with other published methods. [ABSTRACT FROM AUTHOR]