Quantifying Market Efficiency Impacts of Aggregated Distributed Energy Resources

Khaled Alshehri, Mariola Ndrio, Subhonmesh Bose, Tamer Basar

Research output: Contribution to journalArticlepeer-review

Abstract

We focus on the aggregation of distributed energy resources (DERs) through a profit-maximizing intermediary that enables participation of DERs in wholesale electricity markets. Particularly, we study the market efficiency brought in by the large-scale deployment of DERs and explore to what extent such benefits are offset by the profit-maximizing nature of the aggregator. We deploy a game-theoretic framework to study the strategic interactions between an agreggator and DER owners. The proposed model takes into account the stochastic nature of the DER supply. We explicitly characterize the equilibrium of the game and provide illustrative examples to quantify the efficiency loss due to the strategic incentives of the aggregator. Our numerical experiments illustrate the impact of uncertainty and amount of DER integration on the overall market efficiency.

Original languageEnglish (US)
Article number9034009
Pages (from-to)4067-4077
Number of pages11
JournalIEEE Transactions on Power Systems
Volume35
Issue number5
DOIs
StatePublished - Sep 2020

Keywords

  • Distributed Energy Resources
  • Electricity Markets
  • Price of Aggregation

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering

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