Abstract
The current rate structures for the electricity retailing exposes utility providers to the full wholesale market risks, and fail to incentivize end-use customers to better estimate and track their loads. In this paper, we propose a Cost-for-Deviation (CfD) retail-pricing scheme, which is designed to minimize the demand uncertainty of individual customers or communities. We formulate day-ahead planning and real-time tracking optimization problems for individual buildings. We also formulate CfD pricing scheme for community of two buildings and devise a collaboration scheme by which the two buildings negotiate. Both centralized and distributed negotiation mechanisms are presented, and the significance of adopting a transaction cost for fair-trading is discussed. A series of experiments demonstrate that CfD pricing is able to reduce demand uncertainty in a building or a community. Hence, a community's cost of hedging quantity risk in the real-time market also reduces. Our conjecture is that by the virtue of end users being in a position to closely monitor their daily loads and by paying fines for not adhering to their plans would ultimately benefit energy efficiency and will reduce infrastructure costs.
Original language | English (US) |
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Pages (from-to) | 46-56 |
Number of pages | 11 |
Journal | Energy and Buildings |
Volume | 118 |
DOIs | |
State | Published - Apr 15 2016 |
All Science Journal Classification (ASJC) codes
- Civil and Structural Engineering
- Building and Construction
- Mechanical Engineering
- Electrical and Electronic Engineering
Keywords
- Demand side management
- Demand uncertainty
- Electricity retailing
- Model-predictive control
- Transactive energy