Photovoltaic hosting capacity improvement based on the economic comparison between curtailment and network upgrade

The upcoming network investment decisions and regulatory framework adopted by distribution system operators (DSOs) are most likely to be impacted by the integration of fluctuating distributed generation. The economical hosting capacity (HC) improvement method is investigated in this paper as a trade‐off between curtailment and upgrade using a Monte Carlo simulation procedure. The associated costs of both methods are vital indicators for network operators that are trying to maximize the HC and minimize cost. In addition, the breakeven point where curtailment and upgrade costs intersect is the decisive point at which network upgrade becomes sensible as marginal curtailment cost exceeds upgrade cost. A shift in global climate conditions can impact the photovoltaic (PV) levels that motivate network operators to investigate PV penetration, especially in colder climate regions. Thus, the primary objective of this paper is to investigate the shift of the breakeven point to guide DSOs to either adopt PV curtailment as a temporary measure or grid upgrade as a risk aversion strategy considering Finnish climate and load patterns. The real‐time load and PV generation data are utilized for the simulations to consider the dynamic performance indication of three Finnish distribution networks. Curtailment remains a low‐cost option to obtain a percentage HC rise of 13%, 7%, and 8% for rural, suburban, and urban regions, respectively, beyond which curtailment compensation cost surpasses upgrade cost. In essence, PV curtailment serves as an immediate and least‐cost solution to relieve network violations and defer network investment until the HC level (118%, 106%, 97%) making the upgrade a practical option afterwards. This paper presents an analysis of photovoltaic (PV) hosting capacity improvement through a cost comparison of PV curtailment and network upgrade. This comparative analysis provides economic insights to distribution system operators for taking corrective actions regarding network problems arising due to excessive PV integration.