Network-Aware and Welfare-Maximizing Dynamic Pricing for Energy Sharing: Preprint

Ahmed Alahmed, Guido Cavraro, Andrey Bernstein, Lang Tong

Research output: Contribution to conferencePaper

Abstract

The proliferation of behind-the-meter (BTM) distributed energy resources (DER) within the electrical distribution network presents significant supply and demand flexibilities, but also introduces operational challenges such as voltage spikes and reverse power flows. In response, this paper proposes a network-aware dynamic pricing framework tailored for energy-sharing coalitions that aggregate small, but ubiquitous, BTM DER downstream of a distribution system operator's (DSO) revenue meter that adopts a generic net energy metering (NEM) tariff. By formulating a Stackelberg game between the energy-sharing market leader and its prosumers, we show that the dynamic pricing policy induces the prosumers toward a network-safe operation and decentrally maximizes the energysharing social welfare. The dynamic pricing mechanism involves a combination of a locational ex-ante dynamic price and an ex-post allocation, both of which are functions of the energy sharing's BTM DER. The ex-post allocation is proportionate to the price differential between the DSO NEM price and the energy sharing locational price. Simulation results using real DER data and the IEEE 13-bus test systems illustrate the dynamic nature of network-aware pricing at each bus, and its impact on voltage.
Original languageAmerican English
Number of pages11
StatePublished - 2024
EventConference on Decision and Control (CDC 2024) - Milan, Italy
Duration: 16 Dec 202419 Dec 2024

Conference

ConferenceConference on Decision and Control (CDC 2024)
CityMilan, Italy
Period16/12/2419/12/24

NREL Publication Number

  • NREL/CP-5D00-90821

Keywords

  • energy communities
  • energy markets
  • voltage control

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