Community-based transactive energy market concept for 5th generation district heating and cooling through distributed optimization

Fifth-generation district heating and cooling (5GDHC) is an emerging concept that exploits heat sharing among prosumers through a low-temperature bidirectional loop. Coordinating the energy interactions in such a system is a complex problem, typically solved through centralized optimization. In addition to privacy issues for prosumers, centralized optimization can prove too hard to solve for large 5GDHC systems and cannot establish a profit distribution between prosumers. To overcome these drawbacks, this paper develops a community-based transactive energy market framework based on distributed optimization of 5GDHC. The optimization is based on the Jacobi-proximal alternating direction method of multipliers. The approach relies on iterative interactions between the network coordinator and the prosumers, the former adjusting the internal price of thermal energy and the latter adapting their heating and cooling demand. A series of test-case 5GDHC networks involving houses, commercial buildings, data centers and central boilers and chillers were numerically simulated to demonstrate how the proposed framework performs, under three electricity tariff structures (constant, time-of-use or pay for peak). Results show that, for the cases tested, the gap between the proposed approach and global optimization is below 5% and that electricity savings compared to a situation without 5GDHC could reach 40%. The proposed method allowed to dynamically adjust the internal price of thermal energy and the prosumers' demand while considering their thermal dissatisfaction. By facilitating 5GDHC operation, this work could help their practical implementation in the future.