Spatial dependency on flexibility value considering stacked transformer overload cost

Distribution grids in industrial areas are under pressure to increase the utilization of the existing grid and to build more grid due to electrification of existing industries and new power-intensive industries. Distribution system operators (DSOs) are currently considering if and how they can use power system flexibility, such as demand response, to simultaneously avoid overloading their grid assets and avoid investing in new grid. The DSO may choose to operate an asset, such as a transformer, beyond its rated load. However, this accelerates the aging of the transformer, hence decreasing its remaining life. In this work, a methodology is developed which relates the cost of transformer overload to the value of power system flexibility, to determine the DSO’s willingness to pay for a flexibility service. The methodology finds the spatial dependency of a flexibility services’ value by optimizing load shedding in the grid to minimize cost of transformer loss of life (LoL). The methodology is demonstrated in a case study using real grid and load data measured in an industrial area in Norway that includes both medium voltage (MV) and low voltage (LV) transformers.