Abstract
AbstractThe activation of flexible loads through demand side management offers opportunities for more efficient power systems operations. Price-based incentive are a straight-forward form for decentral coordination of these flexible loads. However, their applicability has recently been seen more pessimistic as they may induce new load peaks due to herding effects. We revisit these results by characterizing desynchronized posted pricing approaches. Illustrating highly flexible load by means of electric vehicle charging, we show that these desynchronized rate can mitigate the occurrence of extreme load spikes, improve the utilization of renewable generation and in summary create significant system cost savings. Our results show that simple open-loop pricing can almost match the efficiency of closed-loop adaptive pricing in settings with limited system flexibility. We find that the more renewable generation and flexible load are present in the system, the better more complex pricing schemes fare compared to simple ones. This insight may guide regulators and utilities in establishing more effective pricing schemes in retail electricity markets.
Highlights
An efficient integration of volatile renewable energy sources into the power grid calls for a more flexible demand side to minimize the need for expensive balancing power and storage capacity
Illustrating highly flexible load by means of electric vehicle charging, we show that these desynchronized rate can mitigate the occurrence of extreme load spikes, improve the utilization of renewable generation and in summary create significant system cost savings
We find that the more renewable generation and flexible load are present in the system, the better more complex pricing schemes fare compared to simple ones
Summary
An efficient integration of volatile renewable energy sources into the power grid calls for a more flexible demand side to minimize the need for expensive balancing power and storage capacity. Ramchurn et al (2012) note that [Real-time pricing] ‘‘can create unexpected peaks in demand, when all individuals respond to a signal in the same way, and inadvertently synchronize with others’’. They conclude that ‘‘demand-side management technologies that rely on reacting to control or price signals will not be enough’’. To facilitate the integration of ever higher levels of renewable generation, finding a solution to this challenge is of great interest to utilities and regulators around the globe This paper revisits this price-coordination conundrum and explores rate design options to reduce synchronization under exogenously specified electricity rates in different power system configurations.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
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 call
