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arXiv · 1812.03797

Directly Constraining Marginal Prices in Distribution Grids Using Demand-Side Flexibility

Shantanu Chakraborty·Kyri Baker·Milos Cvetkovic·Remco Verzijlbergh·Zofia Lukszo
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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.

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Shantanu Chakraborty, Kyri Baker, Milos Cvetkovic, Remco Verzijlbergh, Zofia Lukszo. 2018-12-10. Directly Constraining Marginal Prices in Distribution Grids Using Demand-Side Flexibility. https://arxiv.org/abs/1812.03797

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