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Title: Pricing mechanism for flexible loads using distribution grid Hedging Rights
Authors: Hanif, Sarmad
Creutzburg, Philipp
Gooi, Hoay Beng
Hamacher, Thomas
Keywords: Engineering::Electrical and electronic engineering
Issue Date: 2018
Source: Hanif, S., Creutzburg, P., Gooi, H. B., & Hamacher, T. (2019). Pricing mechanism for flexible loads using distribution grid Hedging Rights. IEEE Transactions on Power Systems, 34(5), 4048-4059. doi:10.1109/TPWRS.2018.2862149
Journal: IEEE Transactions on Power Systems
Abstract: This paper proposes a new pricing mechanism for the integration of flexible loads in distribution grids. This price is calculated from an envisioned two-layer local distribution grid market, where flexible load aggregators are price takers and the distribution system operator (DSO) is the market operator. On a day-ahead basis, the DSO runs the local market and clears distribution locational marginal prices (DLMPs). Aggregators purchase energy based on these DLMPs. However, depending upon grid conditions (losses/congestion), the DLMP value increases, causing aggregators to bear high energy procurement cost. To mitigate this issue, a second layer is introduced to compute ex-ante scenario-based Hedging Rights. Through a combination of these two layers, the proposed mechanism 1) improves market competition among the involved entities, 2) maintain the congestion alleviation property of DLMPs, and 3) incorporate the intertemporal energy requirements of flexible loads. The proposed framework is tested on an IEEE benchmark distribution grid. The simulation results show that the proposed pricing mechanism allows aggregators to achieve higher cost-savings, while preserving physical power flow evaluation feature of DLMP.
ISSN: 0885-8950
DOI: 10.1109/TPWRS.2018.2862149
Rights: © 2018 IEEE. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
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