Abstract
Prosumers, users that consume and produce energy, increase the diversity of energy system operations as distributed sources. However, they can reduce energy system reliability by increasing uncertainty. This study presents a novel transaction mechanism based on dynamic pricing for enhancing energy system reliability. The proposed dynamic energy-reliability pricing-based transaction mechanism (ERT) increases the controllability of prosumer uncertainties by a two-dimensional pricing mechanism based on time and reliability status, as compared to conventional time-based one-dimensional energy prices. Under the proposed ERT, utilities and prosumers exchange information about the utility price and the prosumer’s intent in order to ensure that demand is met. A two-way information infrastructure built for prosumer energy trading is used for this task. The utility enhances system reliability using this information, and the prosumer increases revenue through pricing selection. The practical implementation of the proposed ERT is described for both utilities and prosumers. A case study using practical renewable generation data revealed that the proposed ERT improves not only the reliability factor of the utility but also prosumer revenue as compared to a conventional energy-based dynamic pricing case. It is also shown that an economical optimum point that maximizes prosumer net revenue exists when electrical energy storage (EES) is applied to enhance performance. Increasing to the EES capacity provided room for uncertainty management, net revenue is improved, but the economic burden by the EES cost is increased. Under the proposed ERT, the optimal point results in greater EES capacity and higher net revenue enhancement than the conventional case.
Highlights
Along with the development of the smart grid, more and more distributed generation has been deployed in power systems
The reliability band is narrow and the price is set high where the the utility utility requires high reliability. This leads to discrimination between prosumers requires high reliability
This study investigated an energy-reliability pricing-based transaction mechanism (ERT) as a means to enhance energy system reliability
Summary
Along with the development of the smart grid, more and more distributed generation has been deployed in power systems This often includes renewable energy sources due to their availability, applicability, and environmentally friendly nature [1]. Traditional passive consumers, such as households and small businesses, are participating as producers in the electricity market [2]. The presence of prosumers is expected to bring some benefits These include: (1) a modular and tailored energy service to specific end uses, which can vary in quality; (2) grid diversification, by encouraging the large amount of distributed generation deployed to complement decentralized storage options; and (3) efficient wholesale market operations, with minimal transmission congestion and constraints [4]. An increase in renewable sources and decentralization can cause reliability
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