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.
|Title of host publication||2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019|
|Publisher||Institute of Electrical and Electronics Engineers (IEEE)|
|Publication status||Published - 2019|
|Event||2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019 - Washington, United States|
Duration: 18 Feb 2019 → 21 Feb 2019
|Conference||2019 IEEE Power and Energy Society Innovative Smart Grid Technologies Conference, ISGT 2019|
|Period||18/02/19 → 21/02/19|