Exploring demand flexibility in heterogeneous aggregators

Abstract

With the proposed penetration of electric vehicles and advanced metering technology, the demand side is foreseen to play a major role in flexible energy consumption scheduling. On the other hand, the past several years have witnessed utility companies' growing interests to integrate more renewable energy resources. These renewable resources, for example, wind or solar, due to their intermittent nature, brought great uncertainty to the power grid system. In this article, we propose a mechanism that attempts to mitigate the grid operational uncertainty induced by renewable energies by properly exploiting demand flexibility with the help of advanced smart-metering technology. To address the challenge, we develop a novel locational marginal price (LMP)-based pricing scheme that involves active demand-side participation by casting the network objective as a two-stage Stackelberg game between the local grid operator and several aggregators. In contrast to the conventional notion that generation follows load, our game formulation provides more flexibility for the operators and tries to provide adequate incentives for the loads to follow the (stochastic renewable) generation. We use the solution concept of subgame perfect equilibrium to analyze the resulting game. Subsequently, we discuss the optimal real-time conventional capacity planning for the local grid operator to achieve the minimal mismatch between supply and demand with the wind power integration. Finally, we assess our proposed scheme with field data. The simulation results show that our proposed scheme works reasonably well in the long term, even with simple heuristics.