Neighborhood-level coordination and negotiation techniques for managing demand-side flexibility in residential microgrids

The management of demand-side flexibility plays a key role in reliable integration of intermittent renewable energy sources into residential microgrids. Residential microgrid is a dynamic and complex cyber-physical system, which consists of multiple cooperative, non-cooperative and even conflicting entities. Random and separate demand-side management of the multiple entities may have detrimental effects on the grid reliability like the peak “rebound” issue and on the economic benefits for both utilities and consumers. Harmonized coordination, not merely unorganized cooperation, among cooperative entities and negotiation among non-cooperative entities based on information sharing are therefore needed to achieve the neighborhood-level optimal solutions in a residential microgrid. This paper comprehensively reviews the state-of-the-art classification, technologies, architectures, and techniques for neighborhood-level coordination and negotiation in residential microgrids. Various types of coordination and negotiation behaviors are first categorized. The technologies, i.e., demand-side flexible resources involved in coordination and negotiation, are then summarized and introduced, including flexible loads, storage, and distributed generations. The typical architectures for coordination and negotiation are then classified into centralized, decentralized, hierarchical distributed, and non-hierarchical distributed architecture. Last, the major coordination and negotiation techniques, including multi-agent system, optimization and game theory, are reviewed and summarized. The challenges and opportunities for each technique are identified and critically discussed.