Resilience Enhancement Strategy for Distribution System Considering Insurance Investment Budgets

ABSTRACT Climate change‐induced extreme disasters cause significant economic losses to distribution system operators (DSOs), while conventional resilience‐enhancement strategies usually treat investment budgets as exogenous and do not explicitly link disaster‐risk assessment, premium formation and resource allocation. This paper proposes a resilience enhancement strategy for distribution systems considering insurance investment budgets. From the insurer's perspective, historical typhoon trajectories are clustered using a Hausdorff‐distance‐based k ‐means method, and typical branch‐fault scenarios are generated through Monte Carlo simulation. Based on these scenarios, the planning‐stage model evaluates current disaster‐induced load loss and forms an affordable insurance premium for the DSO. The premium serves as the coupling variable that converts disaster‐risk assessment into insurance‐budget‐constrained resource allocation and reserve decisions in the operation stage. The framework is formulated as two scenario‐based stochastic mixed‐integer programming models, jointly considering network reconfiguration, distributed generation allocation, energy storage allocation, state of charge and insurance reserve. The IEEE 33‐bus case verifies the complete mechanism under retained fault scenarios, while a representative severe‐scenario IEEE 118‐bus case examines its applicability under a larger network scale. Results show that the proposed framework reduces load shedding and compensation pressure while maintaining positive insurer profit.