Optimal bidding strategy for demand response aggregator in day-ahead markets via stochastic programming and robust optimization

This paper evaluates the optimal bidding strategy for demand response (DR) aggregator in day-ahead (DA) markets. Because of constraint of minimum power quantity requirement, small-sized customers have to become indirect participants of electricity markets via the DR aggregator, who could offer various contracts accessing customers' demand reduction capacity in advance. In day-ahead markets, DR aggregator schedules those contracts and submits accumulated DR offers to the system operator. The objective is to maximize the profit of the DR aggregator. The key element affecting the bidding decision and aggregator's profit is the uncertain hourly DA prices. The stochastic programming adopts scenario-based approach for helping the profit-seeking DR aggregator control uncertainties. Robust optimization employs forecast values with bounded price intervals to address uncertainties while adjusting the robustness of the solution flexibly. Both scenarios can be modelled as mixed-integer linear programming (MILP) problems which could be solved by available solvers.published_or_final_versio

Modeling Local Energy Market for Energy Management of Multi-Microgrids

The diffusion of distributed energy resources (DERs) has changed the supply-demand balance of power systems. One option to modernize the management of the electricity distribution is to operate the distribution system with interconnected micro-grids (MGs). However, the MG participation in wholesale energy and ancillary service markets creates several challenges in the interactions among the energy market managing entities. To solve these problems, local energy markets (LEMs) have been proposed, where the MGs can trade energy with each other under the management of the LEM manager (LEMM) to minimize their operation cost. In this paper, a local energy market is modeled for multi-MGs (MMGs) to minimize the operation cost of MGs individually and their social welfare in cooperation with each other. In such model, the optimal scheduling of the DERs in each MG is done through the market clearing process. To investigate the effectiveness of the proposed approach, the local energy market is applied to a distribution network with three MGs

A stochastic dual dynamic programming approach for optimal operation of DER aggregators

The operation of aggregators of distributed energy resources (DER) is a highly complex task that is affected by numerous factors of uncertainty such as renewables injections, load levels and market conditions. However, traditional stochastic programming approaches neglect information around temporal dependency of the uncertain variables due to computational tractability limitations. This paper proposes a novel stochastic dual dynamic programming (SDDP) approach for the optimal operation of a DER aggregator. The traditional SDDP framework is extended to capture temporal dependency of the uncertain wind power output, through the integration of an n-order autoregressive (AR) model. This method is demonstrated to achieve a better trade-off between solution efficiency and computational time requirements compared to traditional stochastic programming approaches based on the use of scenario trees

Dynamic Price-Based Demand Response through Linear Regression for Microgrids with Renewable Energy Resources

The green innovations in the energy sector are smart solutions to meet the excessive power requirements through renewable energy resources (RERs). These resources have forwarded the revolutionary relief in control of carbon dioxide gaseous emissions from traditional energy resources. The use of RERs in a heuristic manner is necessary to meet the demand side management in microgrids (MGs). The pricing scheme limitations hinder the profit maximization of MG and their customers. In addition, recent pricing schemes lack mechanistic underpinning. Therefore, a dynamic electricity pricing scheme through linear regression is designed for RERs to maximize the profit of load customers (changeable and unchangeable) in MG. The demand response optimization problem is solved through the particle swarm optimization (PSO) technique. The proposed dynamic electricity pricing scheme is evaluated under two different scenarios. The simulation results verified that the proposed dynamic electricity pricing scheme sustained the profit margins and comforts for changeable and unchangeable load customers as compared to fixed electricity pricing schemes in both scenarios. Hence, the proposed dynamic electricity pricing scheme can readily be used for real microgrids (MGs) to grasp the goal for cleaner energy production

Stochastic Dual Dynamic Programming for Operation of DER Aggregators Under Multi-Dimensional Uncertainty

The operation of aggregators of distributed energy resources (DER) is highly complex, since it entails the optimal coordination of a diverse portfolio of DER under multiple sources of uncertainty. The large number of possible stochastic realizations that arise, can lead to complex operational models that become problematic in real-time market environments. Previous stochastic programming approaches resort to two-stage uncertainty models and scenario reduction techniques to preserve the tractability of the problem. However, two-stage models cannot fully capture the evolution of uncertain processes and the a priori scenario selection can lead to suboptimal decisions. In this context, this paper develops a novel stochastic dual dynamic programming (SDDP) approach which does not require discretization of either the state space or the uncertain variables and can be efficiently applied to a multi-stage uncertainty model. Temporal dependencies of the uncertain variables as well as dependencies among different uncertain variables can be captured through the integration of any linear multidimensional stochastic model, and it is showcased for a p-order vector autoregressive (VAR) model. The proposed approach is compared against a traditional scenario-tree-based approach through a Monte-Carlo validation process, and is demonstrated to achieve a better trade-off between solution efficiency and computational effort

Demand Response Modeling in Microgrid Operation: a Review and Application for Incentive-Based and Time-Based Programs

© 2018 Elsevier Ltd During recent years, with the advent of restructuring in power systems as well as the increase of electricity demand and global fuel energy prices, challenges related to implementing demand response programs (DRPs) have gained remarkable attention of independent system operators (ISOs) and customers, aiming at the improvement of attributes of the load curve and reduction of energy consumption as well as benefiting customers. In this paper, different types of DRPs are modeled based on price elasticity of the demand and the concept of customer benefit. Besides, the impact of implementing DRPs on the operation of grid-connected microgrid (MG) is analyzed. Moreover, several scenarios are presented in order to model uncertainties interfering MG operations including failure of generation units and random outages of transmission lines and upstream line, error in load demand forecasting, uncertainty in production of renewable energies (wind and solar) based distributed generation units, and the possibility that customers do not respond to scheduled interruptions. Simulations are conducted for two principal categories of DRP including incentive-based programs and time-based programs on an 11-bus MG over a 24-h period and also a 14-bus MG over a period of 336 h (two weeks). Simulation results indicate the effects of DRPs on total operation costs, customer's benefit, and load curve as well as determining optimal use of energy resources in the MG operation. In this regard, prioritizing of DRPs on the MG operation is required