TY - GEN
T1 - The Role of Demand-Side Flexibility in Hedging Electricity Price Volatility in Distribution Grids
AU - Chakraborty, Shantanu
AU - Verzijlbergh, Remco
AU - Lukszo, Zofia
AU - Cvetkovic, Milos
AU - Baker, Kyri
PY - 2019
Y1 - 2019
N2 - Locational Marginal Price (LMP) is a dual variable associated with supply-demand matching and represents the cost of delivering power to a particular location if the load at that location increases. In recent times it become more volatile due to increased integration of renewables that are intermittent. The issue of price volatility is further heightened during periods of grid congestion. Motivated by these problems, we propose a market design where, by constraining dual variables, we determine the amount of demand-side flexibility required to limit the rise of LMP. Through our proposed approach a price requesting load can specify its maximum willingness to pay for electricity and through demand-side flexibility hedge against price volatility. For achieving this, an organizational structure for flexibility management is proposed that exhibits the coordination required between the Distribution System Operator (DSO), an aggregator and the price requesting load. To demonstrate the viability of our proposed formulation, we run an illustrative simulation under infinite and finite line capacities.
AB - Locational Marginal Price (LMP) is a dual variable associated with supply-demand matching and represents the cost of delivering power to a particular location if the load at that location increases. In recent times it become more volatile due to increased integration of renewables that are intermittent. The issue of price volatility is further heightened during periods of grid congestion. Motivated by these problems, we propose a market design where, by constraining dual variables, we determine the amount of demand-side flexibility required to limit the rise of LMP. Through our proposed approach a price requesting load can specify its maximum willingness to pay for electricity and through demand-side flexibility hedge against price volatility. For achieving this, an organizational structure for flexibility management is proposed that exhibits the coordination required between the Distribution System Operator (DSO), an aggregator and the price requesting load. To demonstrate the viability of our proposed formulation, we run an illustrative simulation under infinite and finite line capacities.
UR - http://www.scopus.com/inward/record.url?scp=85071462432&partnerID=8YFLogxK
U2 - 10.1109/ISGT.2019.8791642
DO - 10.1109/ISGT.2019.8791642
M3 - Conference contribution
T3 - 2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019
BT - 2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019
PB - Institute of Electrical and Electronics Engineers (IEEE)
T2 - 2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019
Y2 - 18 February 2019 through 21 February 2019
ER -