Decentralized Participation of
Flexible Demand in Electricity
Markets
Problem Setting
In order to unlock the real value of demand flexibility in the new liberalized environment, the demand side should become a direct participant in electricity
markets, a step beyond dynamic pricing schemes. Challenges towards this goal include:
• deployment of suitable intelligent technologies to guarantee minimum engagement by the users
• accurate representation of demand’s flexibility and inter-temporal character in the bidding process; problems of time-independent bidding mechanisms and
representation based on price elasticity concept
• need for a decentralized market mechanism to resolve communicational, computational and information disclosure issues
Decentralized Pool Market Mechanism
The examined pool market is one of a day-ahead horizon and hourly resolution with marginal and uniform pricing
• the market clearing optimization problem is decentralized based on mathematical decomposition techniques
• two-level market architecture: independent surplus maximization problems at the local level and price update
algorithm at the global level
•an original price update algorithm has been developed, accounting for the inter-temporal nature of market
participants and exhibiting high computational efficiency
Agent-Mediated Participation Scheme
In order to deal with the automation and accurate demand flexibility expression challenges,
software agents are embedded in load appliances and act as their market representatives.
Application to Electro-Thermal Loads
Electric Heat Pump (EHP) systems for space heating are considered. The dedicated
agent’s knowledge is modelled in detail and includes:
• building’s thermal behaviour (modelled through second-order equivalent circuit)
• characteristics of EHP (Coefficient of Performance, capacity etc)
• characteristics of physical storage configuration (capacity, efficiency etc)
• users’ preferences (limits of indoor temperature)
Case Studies
• UK system, typical winter day. Commercial buildings of different types (hotels, offices, retail stores), sizes and insulation levels, spread across different UK areas.
• Test cases: EHP systems in 50% of the commercial buildings are assumed flexible and participating in the pool market. Two types of flexibility considered: a)
users allow deviation of the temperature setpoint around base case value (scenarios for allowable deviation of +/-1,2,3 ºC) and b) presence of thermal storage
(scenarios for total storage capacity of 2,4,6 GWh, allocated to the different buildings according to their peak day consumption)
Storage flexibility
Setpoint flexibility
4%
70
2%
60
15%
70
60
10%
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
-2%
40
-4%
30
-6%
20
5%
40
30
0%
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
20
-5%
-8%
10
-10%
0
Time (h)
Low flex
Medium flex
10
High flex
-10%
Base case prices
0
Time (h)
Low flex
Medium flex
High flex
Base case prices
4,0%
30%
3,5%
3,0%
20%
Reduction
Savings
Reduction
25%
15%
10%
2,5%
2,0%
1,5%
1,0%
5%
0,5%
0%
0,0%
Generation costs
Inflexible demand
payments
Low flex
Medium flex
Flexible demand
payments
Total demand payments
Generation costs
High flex
Authors: Dimitrios PAPADASKALOPOULOS, Pierluigi MANCARELLA and Goran STRBAC
Contact: [email protected]
Inflexible demand
payments
Low flex
Flexible demand
payments
Medium flex
High flex
Total demand payments
Price (£/MWh)
1
50
Change in price
price profile
50
Price (£/MWh)
Impact on
Chanege in price
0%