Optimal Network Pricing Strategy for Improving Network Operation in Local Energy Market

Abstract

Abstract The advents of Distributed Energy Resources (DERs) challenge conventional passive control in distribution network, requiring more economical network management approaches and hence indicating the substantial transition of Distribution Network Operator (DNO) to Distribution System Operator (DSO). By applying demand response through Local Energy Market (LEM), DSOs can manage network charges to drive the potential value of DERs. Therefore, the information on how market price can improve the network operation is crucial for LEM design as well as for the new roles in the network. To investigate the impacts of market signal on the DSRs and system operation, this paper proposes a model which can derive the optimal network pricing strategy to benefit both energy producers and distribution networks. The model uses Sequential Least Squares Programming to simulate the response of EV charging to the price and thereby delivers the critical combinations of both renewable energy price and network charges that can achieve the target distribution network operation.