Incentive mechanism for sharing distributed energy resources

Jianxiao Wang, Haiwang Zhong, Junjie Qin, Wenyuan Tang, Ram Rajagopal, Qing Xia, Chongqing Kang

Journal of Modern Power Systems and Clean Energy · 2019 · 78 citations · 23 references

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Concepts

TL;DR

Distribution‑level electricity markets based on consumer bids and offers have been proposed to improve DER controllability and utilization, but transaction costs rise sharply as DER deployment expands. This paper develops an energy sharing scheme that lets users share DERs with neighbors and introduces a novel incentive mechanism for benefit allocation that does not require users to bid on electricity prices. The scheme employs an aggregator to match surplus DER energy with loads, evaluates user contributions via a sharing contribution rate (SCR), and implements a decentralized benefit allocation mechanism that pays users according to their SCR to incentivize participation. Case studies using real‑world data show that both the aggregator and users benefit from the scheme, with benefits allocated proportionally to users’ contributions.

Abstract

To improve the controllability and utilization of distributed energy resources (DERs), distribution-level electricity markets based on consumers' bids and offers have been proposed. However, the transaction costs will dramatically increase with the rapid development of DERs. Therefore, in this paper, we develop an energy sharing scheme that allows users to share DERs with neighbors, and design a novel incentive mechanism for benefit allocation without users' bidding on electricity prices. In the energy sharing scheme, an aggregator organizes a number of electricity users, and trades with the connected power grid. The aggregator is aimed at minimizing the total costs by matching the surplus energy from DERs and electrical loads. A novel index, termed as sharing contribution rate (SCR), is presented to evaluate different users' contributions to the energy sharing. Then, based on users' SCRs, an efficient benefit allocation mechanism is implemented to determine the aggregator's payments to users that incentivize their participation in energy sharing. To avoid users' bidding, we propose a decentralized framework for the energy sharing and incentive mechanism. Case studies based on real-world datasets demonstrate that the aggregator and users can benefit from the energy sharing scheme, and the incentive mechanism allocates the benefits according to users' contributions.

References

23