A Turvey-Shapley Value Method for Distribution Network Cost Allocation

This paper proposes a novel cost-reflective and computationally efficient method for allocating distribution network costs to residential customers. First, the method estimates the growth in peak demand with a 50% probability of exceedance (50POE) and the associated network augmentation costs using a probabilistic long-run marginal cost computation based on the Turvey perturbation method. Second, it allocates these costs to customers on a cost-causal basis using the Shapley value solution concept. To overcome the intractability of the exact Shapley value computation for real-world applications, we implement a fast, scalable and efficient clustering technique based on customers' peak demand contribution, which drastically reduces the Shapley value computation time. Using customer load traces from an Australian smart grid trial (Solar Home Electricity Data), we demonstrate the efficacy of our method by comparing it with established energy- and peak demand-based cost allocation approaches.