IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2402.17201.html
   My bibliography  Save this paper

A Decentralized Market Mechanism for Energy Communities under Operating Envelopes

Author

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

Abstract

We propose an operating envelopes (OEs) aware energy community market mechanism that dynamically charges/rewards its members based on two-part pricing. The OEs are imposed exogenously by a regulated distribution system operator (DSO) on the energy community's revenue meter and is subject to a generalized net energy metering (NEM) tariff design. By formulating the interaction of the community operator and its members as a Stackelberg game, we show that the proposed two-part pricing achieves a Nash equilibrium and maximizes the community's social welfare in a decentralized fashion while ensuring that the community's operation abides by the OEs. The market mechanism conforms with the cost-causation principle and guarantees community members a surplus level no less than their maximum surplus when they autonomously face the DSO. The dynamic and uniform community price is a monotonically decreasing function of the community's aggregate renewable generation. We also analyze the impact of exogenous parameters such as NEM rates and OEs on the value of joining the community. Lastly, through numerical studies, we showcase the community's welfare, and pricing, and compare its members' surplus to customers under the DSO's regime.

Suggested Citation

  • Ahmed S. Alahmed & Guido Cavraro & Andrey Bernstein & Lang Tong, 2024. "A Decentralized Market Mechanism for Energy Communities under Operating Envelopes," Papers 2402.17201, arXiv.org, revised Sep 2024.
    • Handle: RePEc:arx:papers:2402.17201
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2402.17201
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zabihinia Gerdroodbari, Yasin & Khorasany, Mohsen & Razzaghi, Reza, 2022. "Dynamic PQ Operating Envelopes for prosumers in distribution networks," Applied Energy, Elsevier, vol. 325(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zabihinia Gerdroodbari, Yasin & Khorasany, Mohsen & Razzaghi, Reza & Heidari, Rahmat, 2024. "Management of prosumers using dynamic export limits and shared Community Energy Storage," Applied Energy, Elsevier, vol. 355(C).
    2. Ahmed S. Alahmed & Guido Cavraro & Andrey Bernstein & Lang Tong, 2023. "Operating-Envelopes-Aware Decentralized Welfare Maximization for Energy Communities," Papers 2310.07157, arXiv.org.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2402.17201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.