October 1, 2018


MC-CBA toolkit: model and case study

In this document the mathematical model of the MC-CBA framework is described. This framework is exploited by original software, the MC-CBA toolkit. This software integrates the CBA within an MCA process. The MC-CBA toolkit allows for an output-based assessment of the alternatives based on an automated comparison procedure. To describe the features of the MC-CBA toolkit, a case study related to the project selection among different smart grid development plans is presented.

Nowadays, due to the increasing presence of distributed energy resources and the integration of automation and communication technologies the electric power system is evolving towards the smart grid paradigm. Typically, smart grid projects are responsible of wide range impacts which span from the electrical power system to the entire society. Often, these impacts are not easily quantifiable thus an assessment based on their monetary value is not attainable. In this context, traditional approaches as the cost-benefit analysis (CBA) become unfit. The reliable assessment of several planning options can be obtained by using hybrid approaches which combine monetary appraisal tools within a generalised framework based on multi-criteria analysis (MCA). A combined MC-CBA approach preserves the advantages of each methodology while overcoming the respective weaknesses. This report describes the mathematical model of the MC-CBA framework for smart grid projects proposed in previous research activities. This model is exploited by the original software MC-CBA toolkit, which is presented in this document. The MC-CBA toolkit aims at supporting the decision makers by providing an assessment framework which rejects any personal bias by preserving the stakeholders’ interests. In fact, the MC-CBA toolkit allows for an output-based assessment of the smart grid alternatives based on an automated comparison procedure. The MC-CBA toolkit decomposes the decision-making problem by dividing the impacts in three main areas: economic impacts, the contribution towards the smart grid realisation, the externality impacts. The calculation procedure for identifying the best option of the set under analysis relies on the Analytic Hierarchy Process (AHP). In order to illustrate the effectiveness of the MC-CBA toolkit, a case study focused on project selection among different smart grid development plans is presented. More specifically, a set of different upgrading plans based on the Active Distribution Network (ADN) approach and the siting and sizing of distributed energy storage is analysed. The MC-CBA toolkit helps the decision maker to identify the best smart grid investment option; the final aim is to provide a reliable support tool for effectively orienting the investments and the regulatory policies on smart grids.


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