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Title: Economical and Engineering Aspects of Proactive Demand Participation: Centralized versus Bilateral Control Structure

Abstract

The electric grid of the U.S. is evolving from a system characterized by large and centralized fossil-fueled power plants and passive customers to a network with high penetration of distributed energy resources and proactive customers. This project facilitated the evolution of the U.S. electric power grid by enabling proactive participation of demands in electricity market at the power distribution system level. This project has three major achievements. First, we designed a centralized distribution system operator managed electricity market and developed a three-phase alternating current optimal power flow algorithm to coordinate the operation of large-scale flexible loads and distributed energy resources. Second, we designed a decentralized bilateral coordinate framework for retail electricity market, where each participating customer is capable of making decisions regarding energy production and consumption based on information received from transactive neighbors. Third, the impacts of centralized and decentralized demand-side participation scheme on power system operations were evaluated with both large-scale simulations and hardware-in-the-loop demonstrations. The major activities and specific accomplishments of the technical tasks are summarized in Section II. The detailed design of centralized/hierarchical and decentralized/bilateral retail electricity markets and the comparison between the two markets are described in Section III. The accomplishments and conclusions of the projectmore » are presented in Section IV. The major findings of the project falls into three areas, hierarchical distribution system operator managed electricity market, bilateral electricity market and decentralized market coordination, and comparison of centralized and decentralized market coordination mechanisms. In the area of hierarchical distribution system operator managed electricity market design, an integrated wholesale and retail electricity market was shown to be highly effective in extracting the operational flexibility from distributed energy resources to provide services to the wholesale market. A chordal conversion based convex iteration algorithm is not only computationally efficiency but also achieves global optimal solution in coordinating the operations of a large number of heterogeneous distributed energy resources. In the area of decentralized market coordination approach, we showed that bilateral transactions among proactive customers and decentralized transaction clearing mechanism based on simultaneous second-price sealed-bid auction can encourage truthful bidding strategies from the market participations. In addition, the individual customers can rely on a portfolio optimization approach to maximize their returns while minimizing risks. In the area of comparison of centralized and decentralized market coordination mechanisms, we found that the centralized market design results in higher social welfare and lower wholesale market clearing price for electricity. In general, centralized market design favors distributed energy resources and fixed loads. The decentralized market design mostly benefits flexible loads and conventional generators.« less

Authors:
ORCiD logo [1];  [2];  [3]
  1. University of California, Riverside
  2. Washington State Univ., Pullman, WA (United States)
  3. Virginia Polytechnic Inst. and State Univ. (Virginia Tech), Blacksburg, VA (United States)
Publication Date:
Research Org.:
Univ. of California, Riverside, CA (United States)
Sponsoring Org.:
USDOE Office of Electricity Delivery and Energy Reliability (OE)
OSTI Identifier:
1579551
Report Number(s):
DOE-UCR-00840
DOE Contract Number:  
OE0000840
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; Electricity Market; Distribution System; Demand Participation

Citation Formats

Yu, Nanpeng, Dubey, Anamika, and Liu, Chen-Ching. Economical and Engineering Aspects of Proactive Demand Participation: Centralized versus Bilateral Control Structure. United States: N. p., 2019. Web. doi:10.2172/1579551.
Yu, Nanpeng, Dubey, Anamika, & Liu, Chen-Ching. Economical and Engineering Aspects of Proactive Demand Participation: Centralized versus Bilateral Control Structure. United States. doi:10.2172/1579551.
Yu, Nanpeng, Dubey, Anamika, and Liu, Chen-Ching. Mon . "Economical and Engineering Aspects of Proactive Demand Participation: Centralized versus Bilateral Control Structure". United States. doi:10.2172/1579551. https://www.osti.gov/servlets/purl/1579551.
@article{osti_1579551,
title = {Economical and Engineering Aspects of Proactive Demand Participation: Centralized versus Bilateral Control Structure},
author = {Yu, Nanpeng and Dubey, Anamika and Liu, Chen-Ching},
abstractNote = {The electric grid of the U.S. is evolving from a system characterized by large and centralized fossil-fueled power plants and passive customers to a network with high penetration of distributed energy resources and proactive customers. This project facilitated the evolution of the U.S. electric power grid by enabling proactive participation of demands in electricity market at the power distribution system level. This project has three major achievements. First, we designed a centralized distribution system operator managed electricity market and developed a three-phase alternating current optimal power flow algorithm to coordinate the operation of large-scale flexible loads and distributed energy resources. Second, we designed a decentralized bilateral coordinate framework for retail electricity market, where each participating customer is capable of making decisions regarding energy production and consumption based on information received from transactive neighbors. Third, the impacts of centralized and decentralized demand-side participation scheme on power system operations were evaluated with both large-scale simulations and hardware-in-the-loop demonstrations. The major activities and specific accomplishments of the technical tasks are summarized in Section II. The detailed design of centralized/hierarchical and decentralized/bilateral retail electricity markets and the comparison between the two markets are described in Section III. The accomplishments and conclusions of the project are presented in Section IV. The major findings of the project falls into three areas, hierarchical distribution system operator managed electricity market, bilateral electricity market and decentralized market coordination, and comparison of centralized and decentralized market coordination mechanisms. In the area of hierarchical distribution system operator managed electricity market design, an integrated wholesale and retail electricity market was shown to be highly effective in extracting the operational flexibility from distributed energy resources to provide services to the wholesale market. A chordal conversion based convex iteration algorithm is not only computationally efficiency but also achieves global optimal solution in coordinating the operations of a large number of heterogeneous distributed energy resources. In the area of decentralized market coordination approach, we showed that bilateral transactions among proactive customers and decentralized transaction clearing mechanism based on simultaneous second-price sealed-bid auction can encourage truthful bidding strategies from the market participations. In addition, the individual customers can rely on a portfolio optimization approach to maximize their returns while minimizing risks. In the area of comparison of centralized and decentralized market coordination mechanisms, we found that the centralized market design results in higher social welfare and lower wholesale market clearing price for electricity. In general, centralized market design favors distributed energy resources and fixed loads. The decentralized market design mostly benefits flexible loads and conventional generators.},
doi = {10.2172/1579551},
journal = {},
number = ,
volume = ,
place = {United States},
year = {2019},
month = {9}
}

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