Integrated Transmission and Distribution Expansion Planning Considering Customer Actions and Distributed Energy Resources

Abstract

The continued integration of distributed energy resources (DERs) motivates research into integrated system planning. While existing literature shows that DERs can reduce system costs, it often overlooks customer behaviour, particularly DER adoption driven by cost savings and incentives. System cost allocation can influence these decisions, affecting DER uptake, grid injections, and overall system efficiency. Therefore, integrated system planning should consider both system- and customer-level benefits of DERs. This paper proposes a multi-step framework that combines an integrated planning model with cost allocation and retailer business models. The integrated planning model minimizes total system costs subject to network constraints, while the cost allocation and retailer models capture customer responses to costs and DER opportunities. By coordinating these models, the framework represents how customer behaviour influences planning outcomes. The proposed approach is demonstrated on a 36-bus system, with results showing that incorporating customer decision-making reduces overall system costs, lowers reliance on transmission-connected generation, and supports more realistic system planning.