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Open AccessArticle

A Coordination Mechanism For Reducing Price Spikes in Distribution Grids

1
Faculty of Technology, Policy and Management, Delft University of Technology, 2628BX Delft, The Netherlands
2
Civil, Environmental and Architectural Engineering, University of Colorado at Boulder, CO 80309, USA
3
Faculty of Electrical Engineering, Mathematics and Computer Science, Delft University of Technology, 2628XE Delft, The Netherlands
*
Author to whom correspondence should be addressed.
Current address: Delft University of Technology, 2628BX Delft, The Netherlands.
Energies 2020, 13(10), 2500; https://doi.org/10.3390/en13102500
Received: 15 April 2020 / Revised: 10 May 2020 / Accepted: 12 May 2020 / Published: 15 May 2020
(This article belongs to the Special Issue Flexibility in Distribution Systems from EVs and Batteries)
Recently, given the increased integration of renewables and growing uncertainty in demand, the wholesale market price has become highly volatile. Energy communities connected to the main electricity grid may be exposed to this increasing price volatility. Additionally, they may also be exposed to local network congestions, resulting in price spikes. Motivated by this problem, in this paper, we present a coordination mechanism between entities at the distribution grid to reduce price volatility. The mechanism relies on the concept of duality theory in mathematical programming through which explicit constraints can be imposed on the local electricity price. Constraining the dual variable related to price enables the quantification of the demand-side flexibility required to guarantee a certain price limit. We illustrate our approach with a case study of a congested distribution grid and an energy storage system as the source of the required demand-side flexibility. Through detailed simulations, we determine the optimal size and operation of the storage system required to constrain prices. An economic evaluation of the case study shows that the business case for providing the contracted flexibility with the storage system depends strongly on the chosen price limit. View Full-Text
Keywords: demand-side flexibility; duality theory; price volatility; distribution grid demand-side flexibility; duality theory; price volatility; distribution grid
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Chakraborty, S.; Verzijlbergh, R.; Baker, K.; Cvetkovic, M.; Vries, L.D.; Lukszo, Z. A Coordination Mechanism For Reducing Price Spikes in Distribution Grids. Energies 2020, 13, 2500.

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