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Operating-Envelopes-Aware Decentralized Welfare Maximization for Energy Communities

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  • Ahmed S. Alahmed
  • Guido Cavraro
  • Andrey Bernstein
  • Lang Tong

Abstract

We propose an operating-envelope-aware, prosumer-centric, and efficient energy community that aggregates individual and shared community distributed energy resources and transacts with a regulated distribution system operator (DSO) under a generalized net energy metering tariff design. To ensure safe network operation, the DSO imposes dynamic export and import limits, known as dynamic operating envelopes, on end-users' revenue meters. Given the operating envelopes, we propose an incentive-aligned community pricing mechanism under which the decentralized optimization of community members' benefit implies the optimization of overall community welfare. The proposed pricing mechanism satisfies the cost-causation principle and ensures the stability of the energy community in a coalition game setting. Numerical examples provide insights into the characteristics of the proposed pricing mechanism and quantitative measures of its performance.

Suggested Citation

  • Ahmed S. Alahmed & Guido Cavraro & Andrey Bernstein & Lang Tong, 2023. "Operating-Envelopes-Aware Decentralized Welfare Maximization for Energy Communities," Papers 2310.07157, arXiv.org.
    • Handle: RePEc:arx:papers:2310.07157
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    File URL: http://arxiv.org/pdf/2310.07157
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    References listed on IDEAS

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    1. Ahmed S. Alahmed & Lang Tong, 2022. "Integrating Distributed Energy Resources: Optimal Prosumer Decisions and Impacts of Net Metering Tariffs," Papers 2204.06115, arXiv.org, revised May 2022.
    2. Zabihinia Gerdroodbari, Yasin & Khorasany, Mohsen & Razzaghi, Reza, 2022. "Dynamic PQ Operating Envelopes for prosumers in distribution networks," Applied Energy, Elsevier, vol. 325(C).
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