Directly Constraining Marginal Prices in Distribution Grids Using Demand-Side Flexibility
Abstract
Recently, the volatility associated with marginal prices has increased due to large scale integration of renewable generation. Price volatility is undesirable from a consumer perspective. To address this issue, we present a framework for hedging that uses duality theory for quantifying the amount of demand-side flexibility required for constraining marginal prices to the consumers maximum willingness to pay for electricity. Using our formulation, we investigate the ability of an Energy Storage System (ESS), as a demand-side flexibility source, to hedge against electricity price volatility across a multi-time period horizon while accounting for its inter-temporal constraints. Additionally, we analyze the economical benefit that operating the ESS under information forecasts brings to the consumers.
Cite
@article{arxiv.1812.03797,
title = {Directly Constraining Marginal Prices in Distribution Grids Using Demand-Side Flexibility},
author = {Shantanu Chakraborty and Kyri Baker and Milos Cvetkovic and Remco Verzijlbergh and Zofia Lukszo},
journal= {arXiv preprint arXiv:1812.03797},
year = {2018}
}
Comments
Submitted to IEEE Power and Energy Society General Meeting 2019