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Energy
EnergyProcedia 158
Procedia 00(2019)
(2017)6645–6651
000–000
www.elsevier.com/locate/procedia
10th International Conference on Applied Energy (ICAE2018), 22-25 August 2018, Hong Kong,
10th International Conference on Applied Energy
China(ICAE2018), 22-25 August 2018, Hong Kong,
China
Demand Response for Integrating Distributed Energy Resources in
Demand Response for Integrating
The 15th International Symposium Distributed
on District Heating Energy Resources in
and Cooling
Transactive Energy System
Transactive Energy System
Assessing theBiao feasibility of using the heat demand-outdoor
Liaa, Can Wanaa, Kai Yuanbb, Yi Songbb
temperature functionBiao Lifor a
, Cana long-term
Wan , Kai Yuan district heat demand forecast
, Yi Song
College of Electrical Engineering, Zhejiang University, Hangzhou 310027, China
b
State
a Grid Economic and Technological Research Institute Co. Ltd., Beijing 102209, China
College of Electrical Engineering, Zhejiang University, Hangzhou 310027, China
a,b,c
State Grid Economica and Technological
I. Andrić b
*, A. Pina , P. Ferrão , J. Fournier ., B. Lacarrière , O. Le Correc
a Research InstitutebCo. Ltd., Beijing 102209,cChina

a
IN+ Center for Innovation, Technology and Policy Research - Instituto Superior Técnico, Av. Rovisco Pais 1, 1049-001 Lisbon, Portugal
b
Veolia Recherche & Innovation, 291 Avenue Dreyfous Daniel, 78520 Limay, France
Abstract c
Département Systèmes Énergétiques et Environnement - IMT Atlantique, 4 rue Alfred Kastler, 44300 Nantes, France
Abstract
Transactive energy system (TES) is a system of economic and control mechanisms showing high ability to integrate distributed
Transactive energy(DERs).
energy resources system (TES) is a system
This paper of economic
introduces and control
a market-based mechanisms
demand responseshowing
strategyhigh ability toDERs
to integrate integrate
intodistributed
the retail
Abstract
energy
market resources
using (DERs).
transactive This framework.
energy paper introducesA retaila market
market-based
pricingdemand
model isresponse
proposedstrategy to integrate
for retailer to maximize DERs hisinto thetaking
profits retail
market
net loadusing transactive
fluctuations andenergy
grid framework.
price waving A retail market pricing
into account. model ismodel
An operating proposed for retailer to
is established formaximize
end-usershistoprofits
adjusttaking
their
District
net load heating
controllable load networks
fluctuationsor storage are
and gridto commonly
price waving
accommodate addressed
into
to in thewaving
theaccount.
price literature
An operating as one
in the ofmarket.
model
retail theis most effective
established
Case forsolutions
studies end-users
show forto
that decreasing
the adjust the
their
transactive
greenhouse
controllable
between retailgas
load emissions
or storage
market from the building
to accommodate
and end-users sector.
to thetoThese
is contributed price systems
waving
reducing require
in high market.
the retail
the peak-to-valley investmentsCasein
difference which
grid are
studies returned
show
load, that through theand
the transactive
integrating DERs heat
sales. Due
between retail
facilitating tomarket
the changed
a win-win climate
and end-users
situation for bothisconditions
contributedand
parties. building the
to reducing renovation policies,
peak-to-valley heat demand
difference in gridinload,
the integrating
future couldDERs decrease,
and
prolonginga the
facilitating investment
win-win return
situation for period.
both parties.
The main©scope
Copyright 2018ofElsevier
this paper
Ltd.isAll
to assess the feasibility of using the heat demand – outdoor temperature function for heat demand
rights reserved.
©forecast.
2019 The Authors.
The Published
district by
of Alvalade, Elsevier
located Ltd.
in Lisbon (Portugal),committee
was used of as the
a case
Copyright
Selection ©
and2018 Elsevier
peer-review Ltd.
under Allresponsibility
rights reserved.of the scientific 10th study. The district
International is consisted
Conference of 665
on Applied
This is an open
buildings access article under the CC period
BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Selection
Energy and peer-review under responsibility of the scientific committee of the 10th (low,
that
(ICAE2018). vary in both construction and typology. Three weather scenarios medium,Conference
International high) and on three district
Applied
Peer-review under responsibility of the scientific committee of ICAE2018 – The 10th International Conference on Applied Energy.
renovation
Energy scenarios were developed (shallow, intermediate, deep). To estimate the error, obtained heat demand values were
(ICAE2018).
comparedtransactive
Keywords: with results from
energy a dynamic
system; heatenergy
distributed demand model,demand
resources; previously developed
response; and validated by the authors.
retail market
The results
Keywords: showedenergy
transactive that when
system;only weatherenergy
distributed change is considered,
resources; the margin
demand response; ofmarket
retail error could be acceptable for some applications
(the error in annual demand was lower than 20% for all weather scenarios considered). However, after introducing renovation
1.scenarios, the error value increased up to 59.5% (depending on the weather and renovation scenarios combination considered).
Introduction
1.The value of slope coefficient increased on average within the range of 3.8% up to 8% per decade, that corresponds to the
Introduction
decrease in the number of heating hours of 22-139h during the heating season (depending on the combination of weather and
The development of distributed energy resources, particularly photovoltaics (PVs) [1]-[2] and wind power [3]-[5],
renovation
The scenarios considered).
development On the other hand, function intercept increased for(PVs) 7.8-12.7% perand
decade (depending on the
is in a booming stageofleading
distributed
to theenergy resources,
significant particularly
challenges for the photovoltaics
power industry to integrate [1]-[2] DERs wind power [3]-[5],
efficiently. It has
coupled scenarios). The values suggested could be used to modify the function parameters for the scenarios considered, and
is intoa booming
led a focus onstage leading
an ofarea to the significant
“demand sidechallenges for the powerdue industry
to thetoweakness
integrate ofDERs efficiently. It has
improve the accuracy heatcalled
demand estimations. management (DSM)” traditional automatic
led to a focus
generation on an
control area to
(AGC) deal “demand
called with theseside management
challenges (DSM)”
[6]. More and due
moretoprosumers
the weakness of traditional
are appearing automatic
in the demand
generation
side owing
© 2017 control (AGC)
ThetoAuthors.
the gradually to deal with
popularizing
Published these challenges [6]. More and more prosumers are appearing in the
of distributed PVs, particularly rooftop PVs which are vigorously promoted.
by Elsevier Ltd. demand
side owing
InPeer-reviewto the
addition, under gradually popularizing
more responsibility
intelligent devises of distributed
are applied
of the Scientific PVs, particularly
for consumers
Committee rooftop
of The 15thimproving
InternationalthePVs which are
users’ ability
Symposium vigorously
to control
on District promoted.
Heatingthe
and load.
In addition,demand
Therefore,
Cooling. more intelligent
response devises
(DR) playsare applied
a more for
andconsumers improving
more important roles the users’ ability
in integrating to control
DERs the load.
[7]. Traditional
Therefore,
demand demand
response was response (DR)
classified into plays a more
two main andthemore
types: important roles
incentive-based DR andin integrating DERs
the price-based DR[7]. Traditional
(mainly refers
demand response
Keywords: wasForecast;
Heat demand; classified intochange
Climate two main types: the incentive-based DR and the price-based DR (mainly refers
1876-6102 Copyright © 2018 Elsevier Ltd. All rights reserved.
th
Selection
1876-6102and peer-review
Copyright under
© 2018 responsibility
Elsevier Ltd. All of the scientific
rights reserved. committee of the 10 International Conference on Applied Energy (ICAE2018).
Selection and peer-review under responsibility of the scientific committee of the 10th International Conference on Applied Energy (ICAE2018).
1876-6102 © 2017 The Authors. Published by Elsevier Ltd.
Peer-review under responsibility of the Scientific Committee of The 15th International Symposium on District Heating and Cooling.
1876-6102 © 2019 The Authors. Published by Elsevier Ltd.
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review under responsibility of the scientific committee of ICAE2018 – The 10th International Conference on Applied Energy.
10.1016/j.egypro.2019.01.040
6646 Biao Li et al. / Energy Procedia 158 (2019) 6645–6651
2 Author name / Energy Procedia 00 (2018) 000–000

to the time-of-use (TOU) price) [8]. However, the former approach might not respect customer’s privacy and
preferences and the later one may not so reliable for the real-time randomness of generation and load waving. A new
market-based demand response strategy emerges in the transactive energy system which respect the privacy and
preferences of customer for the only exchanging information is the price signal and the amount of transaction energy
[9].
Transactive energy is defined by the GWAC as “a system of economic and control mechanisms that allows the
dynamic balance of supply and demand across the entire electrical infrastructure using value as a key operational
parameter” [10]. TES provides a way to maintain the reliability and security of the power system while increasing
efficiency by coordinating the activity of the growing number of DERs [11]-[12]. Several literatures have been
studied on the impact and strategies of integrating DERs. For example, authors in [13]-[14] discuss the challenge and
impact on the power system integrated with DERs. Some operating schedule and dispatch strategies are proposed to
integrate DERs in [15]-[18]. However, the real-time operating is not mentioned in [13] and they do not consider the
influence of price fluctuating [15]-[17]. The research in [18] presents a two-stage optimal scheduling model for
DERs in the form of a virtual power plant (VPP) in a transactive energy framework. Author in [19] describes a
hierarchical control framework that allows coordination between DERs and demand response. However, the
complexity of the algorithm on above approaches is greatly increased with the growing participants.
In this paper, a market-based demand response model is established in a distributed strategy to relieve power
supply pressure of the grid and integrate DERs into a real-time energy market. Two main roles are considered in this
model: retailer and its participants including consumers, prosumers, distributed energy power stations (DEPS) and
storage owners.

2. Model description

2.1. Retail market pricing model

As a main role in our model, retailer establishes a retail market with responsibility for its pricing. Retailer
purchases energy from the grid, prosumers, DEPS and storage owners, and sell them to the end-users. The
relationship between retail market and its participants is shown in Fig.1.

Retail Market The Grid

End-users

Consumers Prosumers DEPS Storages

realizable but
price signal schedule energy flow
not considered

Fig. 1. Transactive behavior between end-users and the retail market

Assume that the grid provides sufficient energy at the price of pg ,t . The retailer accepts energy demand and
distributed energy generation scheme submitted by end-users, and design the real-time price at the current time t.
Considering maximizing the profit of retailer and balancing the supply and demand, the pricing model is formulated
as an optimization problem. The objective function is given by,

max f r pt Qc,t  pt Pd ,t  pt Ps,t  τpg ,t Pg ,t  Cr ,t  Er ,t (1)


Biao Li et al. / Energy Procedia 158 (2019) 6645–6651 6647
Author name / Energy Procedia 00 (2018) 000–000 3

where pt is the real-time price determined by retailer. Qc,t is total power consumption of end-users at time t. Pg ,t ,
Ps ,t , Pd ,t are respectively the total power purchased from the grid, the storage owners, and market participants with
distributed energy generation. τpg ,t is the preferential grid electricity price for retail market. Cr ,t is the operating cost
of retailer, described as a simple linear function as  Cr ,t aQc,t  b , Er ,t is the potential profit (+) or cost (-) of
retailer caused by price fluctuating and it is described as ( λ is the reliability coefficient of predicted net load caused
by price waving and  t is the deviation rate of retail price at time t),

λt pt (Qc,t  Pd,t


Er ,t   Ps,t ), t 
( pt  pbasic ) / pbasic (2)

In order to balance the supply and demand, the following equality constraint is necessary.

Qc,t  Pd ,t  Ps,t  Pg ,t 
0 (3)

As far as possible to meet the scheme submitted by consumers, the constraint is described by,

 i
(Qc,t  Qco,t ) 
i 2
 ( Pd ,t  Pdo,t )  ( Pso,t 1  Pso,t )  σ
j j 2 2
(4)
i c   d j d   p

where Qco ,t , Pdo,t are respectively the demand and power generation scheme provided by the market participants, 
i j

i
is the tolerable ceiling parameter of the inequality constraints. For simplicity, Qc,t is the energy sold to end-user i,
j
Pd,t is the energy purchased from end-user j, and they are respectively considered as the same proportional changes,

Qc,t Q
co, t
i
Qc,t / i  Qco,t , Pd ,t Pdo, t Pd ,t /
i
 c d
i j j
 jd  p
j
Pdo,t (5)

In this model, the retail market clears the real-time electricity price over tracking changes in the net load.
Normally, the market price fluctuates from the price benchmark due to two factors: the increasing/declining of the
net load and the waving of the grid price. Therefore the comprehensive change rate  t is described as the following
formula ( ω1 and ω 2 are the weights of two factors),

(  i
Qco,t   j
Pdo,t  Pso, t )  (  i
Qco, t 1   j
Pdo, t 1  Pso, t 1 )
pg ,t  pg ,t 1

ic  d j d  p i c  d j d  p
ω1  ω2 (6)
 
t i j
Qco,t 1  Pdo, t 1  Pso, t 1 pg , t 1
i c  d j d  p

Then, the following inequality constraints are set to express price waving tendency,

μ  (  t )   t  t  μ  (  t ) , μ  pbasic  pt  μ + pbasic
 2  2 p p
(7)

 
where μ  、 μ + 、 μ + 、 μ  are the parameters designed by each retailer to show its preference. When the net load
p p

increasing/declining, we have the net load growth rate  t  0 or  t  0 , then the constraint turns into
μ  t  t  μ  t or μ  t  t  μ  t , the price would grow/fall. The constraint in the right is used to limit the
   

range of price fluctuations.

2.2. End-users operating model

To simplify the model, the distributed energy power stations and storages are regarded as the zero-consumption
end-users. In this study, storage contains three states: charge, discharge and turn-off. For more integration of
6648 Biao Li et al. / Energy Procedia 158 (2019) 6645–6651
4 Author name / Energy Procedia 00 (2018) 000–000

renewable energy, we assume that DERs is completely consumed and the DERs generation prediction refers to the
model in [20]. The end-users accept the electricity price pt sent by retail market at current time and adjust their
controllable load or change state of storages at next time interval to adapt to the price fluctuations.
Assume that they are N energy storage units, sorted by cost from low to high. Therefore, the response for
storages can be described as,

S
 t 
Pso,t 1 sgn
 ( t ) Ps , S   k
( N  1)  (8)
k 1   max pt  o() 
k
where Pso,t 1 is the total charge/discharge scheme for storages. Ps is charge/discharge power of the k-th storage unit.
 x  is the largest integer less or equal to x and Sgn(x) is the sign function. o() is a little decimal close to zero (set
to 10-8), in order to insure S  N .  max pt is the largest difference allowed by price fluctuation.
Other end-users’ operating model can formulated as independent optimization problems to minimize their cost.
The objective function for end-user i ( i  c  d  p ) is formulated as,

pt Qco,t +1  Cc,t 1  κν d pt Pdo, t 1


i i i i
min f
c
(9)

i i
where Pdo,t 1 is the sales generation power scheme of end-user i at the next time interval, Qco,t +1 is the energy
consumption scheme submitted end-user i including fixed load, controllable load and self-use generation, described
as Qco,t +1  Qcon ,t +1  Qvo,t +1  Puo,t +1 . κ is used to encourage end-user to use his own generation for priority, which can
i i i i

be set to 0.8 ( i   ) and 0 ( i  p ). ν d ( ν d  {0,1} ) represent the presence or absence of generation. Cc,t 1 is the
i i i
d

Cc,t 1 cQco,t +1  νd dPdo,t 1 .


i i i i
cost of load control and power generation of end-user i, described as 
The DERs generation includes two parts: self-use part and sales part, described as the following constraint,

i i i
Pdo,t 1  Puo,t 1 
Ppo,t 1 (10)

Taking both the price fluctuations and load grow/fall limitation consideration, the controllable load will make
suitable responses,

μ d1 t Dm,t  Qvo,t 1  Qvo,t  μ d2 t Dm,t t  0


i i i i

μ u1 tU m,t  Qvo,t 1  Qvo,t  μ u2 tU m ,t t  0


i i i i
(11)
i i i i i i
Dm ,t Q
vo, t
 Qvmin ,t 1 , U m,t Qvmax ,t 1  Qvo ,t

where μ d1 , μ d2 , μ u1 , μ u2 are the parameters design by each end-users to show their preference. They are freely
adjusted by end-users’ decision at any time.
In addition to the above constraints, there also have some upper and lower bound for the variables,

i i i i i i
Qvmin ,t +1  Qvo, t +1  Qvmax , t +1 , Qco, t +1 , Pdo, t 1 , Puo, t  0 (12)

3. Case study and results

3.1. Simulation set

In the study, we consider about 180 end-users including 120 residents (20 with PVs), 52 commercial users (12
with PVs), 6 distributed photovoltaic power stations (DPPS) and 2 storage owners. The detail parameters of these
participants are listed in Table 1. A typical summer day in China is selected and time interval is set to 15min (refer
Biao Li et al. / Energy Procedia 158 (2019) 6645–6651 6649
Author name / Energy Procedia 00 (2018) 000–000 5

to the distribution network runtime accuracy). The controllable load ratios of different end-users are set by random
number according to their ranges. Similarly, μ d1 (1.0~1.2), μ d2 (0.8~1.0), μ u1 (0.8~1.0), μ u2 (1.0~1.2) are also set by
random number to simulate end-users’ preferences. And the charge/discharge power is 2.5kW for each storage
owner.

Pg ,t 1 Pg ,t  2
i
Qco, t 1
i
Qco, t 2
Consumers Consumers
i i
Q Qco,
pt Prosumers
co,t 1
i
pt 1 Prosumers i
t 2
pt  2
Pdo, t 1 Pdo, t 2
i
Pdo, Retail Market i
Pdo, Retail Market
t 1 t 2
DPPS DPPS

Pso,t 1 Pso,t  2
Storages Storages

Fig. 2. Transactive diagram between market and end-users

For retailer, the grid electricity price pg ,t is set to the PJM energy market hourly LMP of RTO. The baseline
price p basic is the average price of users under the day-ahead energy market price, calculated to $0.03982/kWh
 
($39.8178/MWh). The market prices fluctuate around benchmark price and μ - , μ  , μ - , μ  are respectively set to
p p

0.6, 1.0, 0.8,1.2. The tolerable ceiling parameter of the imbalance  is set to 1.0. In addition, a=4.0*10-4, b=constant
(set to zero for simplicity), c=0.02, d=0.01, λ =0.5, τ =0.95, ω1 =0.6, and ω 2 =1.0. As shown in Fig.2, the market-
based demand response model is essentially a collaborative rolling optimization model.

3.2. Results and discussion

In this section, simulation results are presented to illustrate the behaviors of end-users and retailer. The RTO
price (grid price) and retail market price are shown in Fig.3 (a). With the fluctuations of electric price in retail
market, the curves of end-users’ costs and its savings are shown in Fig.3 (b). The impacts on end-users
profits/savings in this model are summarized in Table 1. We can see that 172 end-users gain their advantages while
only 8 end-users (2 residents users and 6 commercial users) losing a little benefit. The retailer also gains his profit
with $1.9350. The proposed model achieves a win-win situation for end-users and retailer.

Table 1. Market participants and their profits/savings.


Range of load Controllable Winner Total profits
Categories subcategories Number
(a day) (kWh) load Ratio (%) percentage (%) /savings ($)
Residents users No.41-140 2.08~20.58 20~40 98.0 2.7604
Consumers
Commercial users No.141-180 24.83~126.47 10~30 85.0 6.1942
Residents users (+PVs) No.3-22 8.43~18.35 20~40 100.0 4.2001
Prosumers
Commercial users (+PVs) No.23-34 27.10~124.33 10~30 100.0 6.7173
Distributed PVs power stations No.35-40 0 0 100.0 4.5234
Storage owners No.1-2 0 0 100.0 0.3484
Total 180 3433.05 32.15 95.6 24.7438

Fig.4 depicts end-users’ response to price fluctuations in the retail market. The total load is shown in Fig.3 (a).
The blue curves describe the original net load (the black curves) cut by the distributed photovoltaic generation, and
the red curves represent the net load influenced by the controllable load, DERs and storages when end-users
participating in the retail market. Evidently, the peak load is significantly reduced, and there is a slight increase in
valley load. The result shows that the peak-to-valley difference is cut by 33.69%. More detail information is shown
in Fig.4 (b)-(d). It is contributed to reduce peak load a lot because of highly coincident in the peak load and peak
6650 Biao Li et al. / Energy Procedia 158 (2019) 6645–6651
6 Author name / Energy Procedia 00 (2018) 000–000

distributed photovoltaic generation. We can see end-users increase load (controllable load changes are above zero)
during the low grid load and decrease during the high load. A similar situation occurs on the storages. In short, the
model could effectively reduce the peak-to-valley difference and release the grid load pressure.

Fig. 3. Price fluctuations of energy market and end-users’ costs Fig. 4. End-users’ behaviors response to price fluctuations

4. Conclusion

In this paper, we propose a market-based demand response strategy for integrating DERs in transactive energy
framework. The retailer determines real-time transaction price considering not only the load changes when
integrating DERs but the gird price fluctuations. The end-users participate in the market and adjust their controllable
load or storage to adapt to the price fluctuations. As shown in simulation results, the proposed approach is high
effective at peak shaving and DERs integrating. In addition, the increase number of users does not change the
amount of variables and algorithm complexity of the model because each optimization is solved independent by
each end-user or retailer. Moreover, the end-users can set parameters personally to express their preference.

Acknowledgements

This work was partially supported by National Key R&D Program of China (2018YFB0905000), National
Natural Science Foundation of China (51761135015), and the Fundamental Research Funds for the Central
Universities (2018QNA4015).

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