Transactive Energy System for Distribution Network Management: Procuring Residential Flexibility Services Under Dynamic Pricing

Abstract

The formulation of dynamic pricing is one of the emerging solutions to guide residential demand for the benefits of the bulk power system. However, the schedule of residential demand in response to time-differentiated energy prices could cause congestions in distribution networks at both the lowest-price and highest-price time intervals. To enable the adoption of dynamic pricing, this work presents a novel framework to manage the constraints of distribution networks based on the concept of Transactive Energy System (TES). The TES-based framework produces incentives during network issues to unlock customers’ flexibility services to reschedule controllable assets (e.g., batteries). By running Home Energy Management Systems (HEMS), the flexibility of customers to modify schedules are quantified against predefined set of incentives. For each incentive, the amounts of net-demand change per customer are aggregated and submitted through aggregators to the Distribution System Operator (DSO) in the forms of both generation offers (reducing demand) and demand offers (increasing demand). The latter are crucial to cater for generation-driven network issues. The resulting aggregators’ staircase bidding curves are embedded to an advanced Optimal Power Flow (OPF) model to identify the successful offers to manage network constraints whilst minimizing incentives paid to aggregators. This allows defining incentives and quantities directly without extensive iterations between DSO and aggregators. The application of the framework to an urban 11kV feeder shows its effectiveness to manage congestions. However, the highly variations in dynamic prices increase the amounts of incentives particularly when flexibility services are requested at evening and night time intervals.