Network-Aware and Welfare-Maximizing Dynamic Pricing for Energy Sharing
CoRR(2024)
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 energy-sharing 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.
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