Abstract
Liberalized electricity markets, smart grids and high penetration of renewable energy sources (RESs) led to the development of novel markets, whose objective is the harmonization between production and demand, usually noted as real time of flexibility markets. This necessitates the development of novel pricing schemes able to allow energy service providers (ESPs) to maximize their aggregated profits from the traditional markets (trading between wholesale/day-ahead and retail markets) and the innovative flexibility markets. In the same time, ESPs have to offer their end users (consumers) competitive (low cost) energy services. In this context, novel pricing schemes must act, among others, as automated demand side management (DSM) techniques that are able to trigger the desired behavioral changes according to the flexibility market prices in energy consumption curves (ECCs) of the consumers. Energy pricing schemes proposed so far, e.g. real-time pricing, interact in an efficient way with wholesale market. But they do not provide strong enough financial incentives to consumers to modify their energy consumption habits towards energy cost curtailment. Thus, they do not interact efficiently with flexibility markets. Therefore, we develop a flexibility real-time pricing (FRTP) scheme, which offers a dynamically adjustable level of financial incentives to participating users by fairly rewarding the ones that make desirable behavioral changes in their ECCs. Performance evaluation results demonstrate that the proposed FRTP is able to offer a 15%–30% more attractive trade-off between the stacked profits of ESPs, i.e. the sum of the profits from retail and flexibility markets, and the satisfaction of the consumers.
Highlights
The lack of direct controllability of the renewable energy sources (RESs) is the main hindrance to the increase of RES penetration in smart grids
In the context of SOCIALENERGY [6, 7], we focus on the development of innovative business models for energy service providers (ESPs) and their automated and optimal operation through an information and communication technology (ICT) platform [8]
Incentivized from all the above and by evolving the logic and the architecture of the recent pricing schemes found in the literature, this paper presents: 1) A novel pricing scheme architecture, referred to as flexibility real-time pricing (FRTP), which allows progressive ESPs to simultaneously participate in multiple energy markets e.g. day-ahead and real-time markets, and maximize their aggregated profits dynamically by harvesting the heterogeneity of the flexibility levels of consumers, and providing them with incentives in a fair and efficient way
Summary
The lack of direct controllability of the renewable energy sources (RESs) is the main hindrance to the increase of RES penetration in smart grids. The main objectives of the retails pricing schemes (acting as DSM algorithms) are among others [5]: À the maximization of users’ satisfaction/welfare, ` the maximization of ESP’s profits, ́ the minimization of aggregated energy consumption and/or system costs, etc. Incentivized from all the above and by evolving the logic and the architecture of the recent pricing schemes found in the literature, this paper presents: 1) A novel pricing scheme architecture, referred to as flexibility real-time pricing (FRTP), which allows progressive ESPs to simultaneously participate in multiple energy markets e.g. day-ahead and real-time markets, and maximize their aggregated profits dynamically by harvesting the heterogeneity of the flexibility levels of consumers, and providing them with incentives in a fair and efficient way.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
