Abstract

crucial challenge in future smart energy grids is the large-scale coordination of distributed energy demand and generation. The well-known PowerMatcher is a promising approach that integrates demand and supply flexibility in the operation of the electricity system through dynamic pricing and a hierarchical bidding coordination scheme. However, as the PowerMatcher focuses on short-term coordination of demand and supply, it cannot fully exploit the flexibility of e.g. electric vehicles over longer periods of time. In this paper, we propose an extension of the PowerMatcher comprising a planning module, which provides coordinated predictions of demand/price over longer times as input to the users for determining their short-term bids. The optimal short-term bidding strategy minimizing a user's costs is then formulated as a Stochastic Dynamic Programming (SDP) problem. We derive an analytic solution for this SDP problem leading to a simple short-term bidding strategy. Numerical results using real-world data show a substantial performance improvement compared to the standard PowerMatcher, without significant additional complexity.

Abstract

crucial challenge in future smart energy grids is the large-scale coordination of distributed energy demand and generation. The well-known PowerMatcher is a promising approach that integrates demand and supply exibility in the operation of the electricity system through dynamic pricing and a hierarchical bidding coordination scheme. However, as the PowerMatcher focuses on short-term coordination of demand and supply, it cannot fully exploit the exibility of e.g. electric vehicles over longer periods of time. In this paper, we propose an extension of the PowerMatcher comprising a planning module, which provides coordinated predictions of demand/price over longer times as input to the users for determining their short-term bids. The optimal short-term bidding strategy minimizing a user's costs is then formulated as a Stochastic Dynamic Programming (SDP) problem. We derive an analytic solution for this SDP problem leading to a simple short-term bidding strategy. Numerical results using real-world data show a substantial performance improvement compared to the standard PowerMatcher, without significant additional complexity.