Assessment of grid-friendly collective optimization framework for distributed energy resources

Abstract

Abstract-Distributed energy resources have the potential to provide services to facilities and buildings at lower cost and environmental impact in comparison to traditional electric-gridonly services. The reduced cost could result from a combination of higher system efficiency and exploitation of electricity tariff structures. Traditionally, electricity tariffs are designed to encourage the use of 'off peak' power and discourage the use of 'onpeak' power, although recent developments in renewable energy resources and distributed generation systems (such as their increasing levels of penetration and their increased controllability) are resulting in pressures to adopt tariffs of increasing complexity. Independently of the tariff structure, more or less sophisticated methods exist that allow distributed energy resources to take advantage of such tariffs, ranging from simple pre-planned schedules to Software-as-a-Service schedule optimization tools. However, as the penetration of distributed energy resources increases, there is an increasing chance of a 'tragedy of the commons' mechanism taking place, where taking advantage of tariffs for local benefit can ultimately result in degradation of service and higher energy costs for all. In this work, we use a scheduling optimization tool, in combination with a power distribution system simulator, to investigate techniques that could mitigate the deleterious effect of 'selfish' optimization, so that the high-penetration use of distributed energy resources to reduce operating costs remains advantageous while the quality of service and overall energy cost to the community is not affected.