Conference PaperPDF Available

Renewable energy sources in a transactive energy market

AbstractDue to government policies, the declining cost of
renewable energy technology and the increased costs of fossil
fuels, energy sources such as wind and solar are becoming a
larger part of the power producing mix. As renewable generators
start to replace conventional sources such as coal, oil, gas and
nuclear there is a growing concern by utility operators that the
power system reliability may be compromised. Additionally, as
more and more customers begin to produce their own energy
there is a growing concern of market parity. As consumers
become prosumers the utility is left with the role of maintaining
the grid despite declining revenues. Those who cannot afford
their own renewables sources are also left to foot the bill as rates
rise. Therefore the current market mechanisms do not properly
distribute the costs as well as ensure grid reliability. This paper
seeks to classify the costs and benefits of renewables for all
market participants using the Transactive Energy Framework
proposed by the GridWise Architecture Council in 2013.
Index Terms Power system economics, Power system
reliability, Renewable energy sources, Solar energy, Wind energy
oth wind and solar have the potential to provide much of
the world’s energy needs. Wind capacity has more than
tripled in the past 5 years as manufactures have begun to
produce larger turbines. At the end of 2009, 159.2 gigawatts
(GW) of wind power was available worldwide, with some
countries such as Denmark, Spain and Portugal having
penetration levels over 14%. Government policies mandating
renewable portfolio standards (RPS) have required that many
countries increase their production from renewable sources.
The European Union has an RPS of 20% by 2020 and the
United States 20% by 2030. Some states have gone even
further such as California which has an RPS of 33% by 2020
The other major source of renewable energy is the sun. Solar
energy can be collected directly using photovoltaic (PV) cells
or indirectly by concentrating solar power to produce steam.
PV penetration has grown tremendously over the past few
This work was submitted as part of University of New Brunswick’s
EE_6603 course on renewables.
The authors are students in the faculty of Interdisciplinary Studies at the
University of New Brunswick, P.O. BOX 4400 Fredericton, NB, Canada, E3B
5A3 (email:,
years as the cost of panels has reached grid parity in many
regions of the world. In U.S. States such as California, Hawaii,
Kentucky, New York and Texas, high electricity prices and
the low cost of solar has prompted many customers to install
solar panels on their homes [2].
In 2013, the Edison Electric Institute, the association that
represents all U.S. investor owned electric companies,
published a report entitled Disruptive Challenges. In this
report, the authors described the utility death spiral; where
renewable costs would be so low, that customers would
simply forego use of the grid, other than for backup [3].
Fig. 1. Utility Death Spiral describing the increased loss of revenues by
electric utility companies.
Case in point, an article by the Economist in 2013, showcased
how European Utilities have lost almost 500 Billion in Market
Capitalization since 2008 [4]. Despite lost revenues utilities
must still ensure the reliability of the grid. This problem is
compounded by the uncertainty and intermittency of both
wind and solar which provide many complications to grid
stability and may cause additional costs for utilities and even
consumers. In 2013, the American Physics Society’s report on
integrating renewables on the grid stated that accommodating
more than 30 % renewable electricity on the grid would
require new approaches to extend and operate the grid [5].
One of the main issues is that many of the costs and benefits
of renewables are not properly understood, or even quantified.
This problem has been exacerbated in Germany, where overly
aggressive renewables subsidies have caused electricity rates
to soar, causing fears that the German economy as a whole
will become less competitive as the cost of manufacturing also
Renewable Energy Sources in a Transactive
Energy Market
Tugcan Sahin, Daniel Shereck
rises. Therefore a new approach is needed to properly account
for the costs and benefits of renewables on the grid.
Such an approach is currently being developed. The
Department of Energy (DOE) with the help of the Gridwise
Architecture Council, the IEEE Power & Energy Society
(PES) and many others has been working on a new market
based approach called Transactive Energy that can help to
provide reliability and economic optimization of the grid. In
this paper we will look at how Transactive Energy can help
manage these issues by classifying the costs and benefits of
each market participant in the renewable energy marketplace.
Over the past decade, the use of demand response and other
flexible distributed resources for market efficiency and grid
reliability has grown dramatically. The Federal Electric
Regulatory Commission (FERC) “assist consumers in
obtaining reliable, efficient and sustainable energy services at
a reasonable cost through appropriate regulatory and market
means” [6].
As we consider the need to substantially scale the use of
distributed energy resources (DERS), there has been growing
focus on the need to address not only the economics, but also
the control system requirements to ensure grid reliability. This
has led to a focus on an area of activity called “Transactive
Energy.” Transactive energy refers to: “the combination of
economic and control techniques to improve grid reliability
and efficiency. These techniques may also be used to optimize
operations within a customer’s facility” [7].
In its simplest of definitions transactive energy is comprised
of an exchange or transaction of goods, services or funds
between a requester and a responder. Innovative market
designs and access to more and more information allows
stakeholders to enter new value streams allowing for the
concept of transactive energy to take hold and grow.
Fig. 2. This simple diagram illustrates the roles within a market transaction.
In order to classify the costs and benefits of renewables in the
grid the following Transaction Energy taxonomy will be used.
Renewable costs and benefits will be classified by Transactive
Energy product, market and by participant.
A. Transactive Energy Products
In Transactive Energy there are two products that are
exchanged between Requester and Responder. The two
products are: energy and transportation.
Fig. 3. Products in Transactive Energy Framework
1) Energy
Electric energy is produced by a market participant at a
particular place and at a particular time.
2) Transportation
The energy is then transported by a market participant to a
different place at same time where the energy may be used or
re-transported somewhere else.
B. Transactive Energy Markets
There are two types of markets in Transactive Energy: the
forward market and the spot market.
1) Forward Market
This market is based on a contract for future delivery.
Producers use forward markets to limit their investment risk.
2) Spot Market
This market is used to trade products for immediate delivery;
this contrasts with forward markets in which delivery is due at
a later date.
C. Transactive Energy Market Participants
In order to produce, transport and consume energy from
renewables sources the following participants can be found in
the market:
1) Renewable Energy Systems (RES)
This participant is responsible for producing electrical energy
from renewable sources such as wind and solar.
2) Electric Utility
An electric utility is generally composed of generation,
transmission and distribution. In a deregulated market each of
these functions may be operated by a separate company. The
generator is responsible for producing energy. In this case
assume that it is based on fossil fuels. The transmission and
distribution system operators (DSO and TSO) are responsible
for the transportation of energy from producers to consumers.
3) Consumers
This participant acquires electrical energy for their personal
4) Regulator or Government
This participant is responsible for ensuring the safe, efficient,
orderly and environmentally responsible operation of the
marketplace. For example, the government or regulator may
take into account environmental externalities such as Green
House Gas (GHG) Emissions. Additionally the government
may levy fees or benefits to ensure grid reliability and
compliance with various standards.
The Transactive Energy taxonomy and the products,
markets and participants described above will form the basis
of our classification scheme for renewably energy costs and
Fig. 4. Classification scheme for renewable energy costs and benefits per
market participant.
Energy is produced by Renewable Energy Systems and sold
on either the spot or the forward market to consumers. The
energy is transported by the TSO or DSO.
In order to produce energy from wind or solar a Renewable
Energy System owner needs to build or buy the equipment and
deploy a wind turbine or PV cell (or farm / array). The
following is a breakdown of costs for producing renewable
energy from these two sources by production phase.
A. Preparation Costs
These costs are associated with the preparation of the site
and include:
1. Site surveys to evaluate wind speed and direction, or
analysis of solar radiation
2. Soil analysis for installation of towers
3. Environment Impact Assessments
4. Purchase or lease of land
5. Grid impact assessment
B. Build/Buy Costs
These costs are associated with the equipment.
1. Wind turbine or solar panels
2. Wiring and accessories
3. Control equipment
4. Site access (ex: road) and protection (ex: fence)
C. Deploy Costs
These costs are associated with the deployment of the
1. Construction and labor costs
D. Operation Costs
1. Administration and Maintenance costs
2. Operator Costs
3. Transportation Costs (to TSO/DSO)
E. Benefits
The benefits are derived from sales of the energy.
1. Forward Market Revenues are contracted in advance.
An agreed upon amount of energy over a period of
time is sold to the consumer. This is typically
completed with a power purchasing agreement.
2. Spot Market Revenues are generated by selling
excess energy in real time. If the renewable provider
generates more energy than was sold on the forward
market they may sell the excess energy on the spot
The electric utility is responsible for ensuring that electric
energy that is delivered to customers meets certain standards.
In North America these include ANSI standards for both
Voltage at 120V and Frequency at 60Hz. Additional
standardization groups such as FERC and NERC set
requirements on utilities to ensure the overall reliability of the
grid and the maintenance of the transmission interconnections.
The maintenance of power balance occurs at varying levels
according to different time frames. In the context of
Transactive Energy the following time frames are expressed in
terms of the forward and capacity markets [8]. In essence,
each time frame represents an energy product which may be
sold in the Transactive Energy marketplace. Currently, the
government and regulatory agencies set requirements on each
of these energy products and there is an active market for them
in many parts of the world. As can be seen below, the value of
each product rises as the time interval decreases.
Energy Products Based on Time Interval
balance and
frequency dip
balance and
4 secs
to 3
Balance and
< 5
balance and
and reserve
< 24
balance and
and reserve
> 1 year
Meet load
As renewable energy systems are dependent on their source
for production, renewable systems using wind and sun are
highly intermittent. As the wind may increase or drop
suddenly or as clouds may pass unexpectedly, a utility that
depends on renewables to meet its customers load
requirements will incur additional costs to maintain grid
reliability. This will drive the utility’s needs to produce or
purchase more energy on the spot market.
A. Spot Market Energy Products
The fact that solar and wind are both intermittent and non
dispatchable is well known; however the costs associated with
this are not always well understood.
Forecasting the expected production of renewables at times
frames of less than one hour is quite difficult. Therefore when
systems have a large amount of renewables it is necessary to
consider the situation when there is a big amount of fast ramp
down [8] as the variability of wind and solar power can be
very high. Depending on the aggregation level, solar plant
output levels can decrease/increase anywhere from 20% to
80%, and wind can vary from 5% to 30% within 1 minute.
NERC sets minimum reserve requirements on grid operators
to ensure that generators can meet load requirements within a
specific amount of time. NERC regulation BAL-STD-002-0
states that generators must provide enough reserve capacity to
1. Supply Requirements for load variations
2. Replace generation capacity due to forced outages
3. Meet on demand obligations
4. Replace energy lost due to curtailment of interruptible
In order to meet load following and reserve requirements three
approaches may be utilized: increase generation, increase
storage or increase demand response. The main approach
historically has been to use fast operating plants such as gas
turbines. One of the issues with these types of plants is the
thermal lag which requires them to be run simply to stay warm
[10]. During this time they also emit GHG which negate many
of the benefits of renewable resources. For this reason many
utilities are increasingly looking to storage and demand
response solutions. Each of these comes at a high cost to
utilities. Therefore additional costs to utilities for allowing
renewables on the grid include:
1. Additional spinning and non spinning reserve costs
2. Additional Demand Response Payments
3. Additional costs for storage
B. Spot Market Energy Benefits
At this time it is difficult to qualify the benefits that utilities
can derive from renewables on the spot market. One
possibility is that wind turbines consume reactive energy. If
controlled, the additional VARs could be used to offset the
production of reactive energy from commercial and industrial
C. Forward Market Energy Costs
In order for renewable energy producers to mitigate the risk of
building plants, they will sell their expected power on the
forward markets to utilities. In the yearly market the costs and
benefits are generally well understood. Models for assessing
the daily production of renewable energy systems have been
around for some time and generally fit well into existing
utility planning tools.
Therefore the costs associated with daily to yearly time frames
which the utility might incur include:
1. Forward capacity costs from buying the renewable
energy from producers
2. Additional costs for modeling and forecasting
renewable energy production (this may be passed on
to the energy producer)
3. Lost revenues from wind purchases during nighttime
if demand is low
4. Lost revenues from solar purchases during sunny
weekend days when demand is low (ex: Sunny
Summer Sunday (3S) where energy is spilt [11])
D. Forward Market Energy Benefits
These include the benefits derived from the sale of electricity
to its consumers. Examples of benefits from using renewable
resources include:
1. Move from OPEX to CAPEX as less reliance on
volatility of fossil fuel markets
2. Revenues derived from the sale of electricity to the
consumers, which are recovered through electricity
In the simplest of terms consumer costs are generally related
to their energy consumption and demand charges. As well as
any supporting equipment such as meters and power quality
devices such as surge protectors that may be required. The
benefit to customers is simply the use of electricity for their
The regulator will take into account externalities such as grid
reliability and pollution. The regulator will charge these costs
back to the other market participants by enforcing standards
and regulations as well as by applying taxes, fees, credits,
penalties and other market mechanisms.
The benefit derived by the Government or Regulator is
generally shared amongst all of the population; however, this
is accomplished to varying degrees and with mixed results.
For example, Germany has recently changed its Feed in Tariff
(FIT) Structure for consumers of renewable energy to better
account for the costs of producing renewable energy.
The following chapter focuses on costs occurring due to the
transport of renewable energy throughout the grid. This
classification scheme tries to better identify upcoming costs
considering the growing number of renewable energy systems
(RES) connected to the grid. In doing so the scheme focuses
on major challenges and tries to identify costs and benefits
considering the four roles of market participants stated in the
A. Challenges
1) Distance
In most cases attractive location for wind and sun are far away
from load centers. As an example altitude, smooth surfaces
and low roughness lengths or other various topological factors
can dramatically increase a location’s attractiveness for the
usage of renewable energy systems. Long distances for energy
transportation can be challenging due to congestion, necessary
grid upgrades (sizing) and bi-directional control and
communication capabilities as well as costly transmission
lines. Furthermore geographical and location specific effects
of a RES can occur, such as harmonics, stability and voltage
regulation challenges. In addition to that public acceptance
and environmental concerns make the selection of RES
locations even more difficult.
2) Regulation
Various regulatory bodies try to implement pre-authorization
processes to orchestrate RES implementations and their
connection to the grid in order to leverage synergies and
decrease investment and transportation costs. Many regions
that implemented a regulatory body that approves RES
integration projects in order to decrease investment and
transport costs are often over challenged due to complexity,
high number of stakeholders and limited amount of resources
resulting in long processing times and increasing costs.
3) Change of traditional role of Electric Utility
The traditional market participant roles blur as consumers
become producers. Electric Utilities have to manage the
growing amount of RES connected to the grid in order to
provide ongoing grid stability and power quality. Moreover
they have to define and continuously update their access
policies for RES considering standards such as IEEE 1547-
2003, UL 1741 and NEC Article 690. Electric Utilities as
transportation providers have to face these challenges, besides
their day-to-day business operation. This becomes an
increasing challenge while revenue and skilled personal
decreases (high age of average employee), resulting in higher
operation costs.
4) Protection
Standard protection equipment such as circuit breakers and
fuses were used for a radial design of the electric grid,
assuming unidirectional power flow. These devices provide
only one-way protection, which leads to following challenges
if RES are integrated at the close end of the radial system:
Reverse power flow: if a fault occurs isolation from
the substation is not enough, the RES has to be
Fault current of RES: during the fault, the fault
current of the RES has to be modeled and managed
Relay desensitization: Shifting fault currents lead to
unsafe functioning of other protection devices
5) Grid Stability
Voltage Regulation[10]:
Electric Utilities have to provide voltage with a permissible
range, which is around ±5% of the nominal voltage in North
America. Standard equipments that help to achieve voltage
regulation, such as load tap changers, voltage regulators and
capacitors were not designed for a growing number of
distributed RES. More advanced technologies can control and
communicate voltage levels, so the Electrical Utility has a
better understanding of the grid operation. Issues with the
equipment in the field that may arise are:
Maintain voltage levels, when RES are turned on and
Wear on voltage regulation equipment, due to high
amount of changes (shorter life-cycles)
Adjustable voltage or reactive power (VAR) with the
lack of control and communication capabilities
Frequency Regulation[10]:
Similar to voltage standards utilities must maintain frequency
with a permissible range of 60 Hz ± 0.5 Hz, which is the
nominal value in North America.
One of the issues is that wind generators and PV arrays feed
the grid through switch-controlled generators (inverters)
whose dynamic behavior differs from that of conventional
generators. Without mechanical inertia, the switch controlled
generators do not intrinsically stabilize the grid frequency.
Therefore this may have an impact on the primary and thus
secondary reserve markets. Even though this additional
challenge is classified as part of the transportation cost in this
scheme, it may be worth considering this as a cost within the
primary energy spot marketplace.
B. Costs
In order to keep up with more and more RES systems
connected to the grid, there is a growing demand for
identification of roles and responsibilities, cost and
understanding of impacts on grid operation and reliability and
preventive equipments to keep the grid stable.
Building up on the Transactional Energy framework the
provided classification scheme focuses on the following main
areas: grid connection costs, necessary grid upgrade costs and
their costs associated to short term and long term operation
and maintenance. Further areas that can be elaborated such as
specific scenarios like municipalization, where societies take
over the transportation system in order to leverage
infrastructure or decrease costs for energy products. This
scenario is not analyzed within this paper.
1) Grid Connection Costs:
These one-time costs are associated with the connection of the
RES to the Grid, these costs are usually covered by the RES
1. Authorization process (Regulator and Electric Utility)
2. New distribution/transmission line costs
3. New or Advanced equipment costs such as
a. Protection equipment
b. (Net-) Metering equipment
c. Power conditioning equipment
2) Grid Upgrade Costs:
These one-time costs are associated with the upgrade of grid
elements in order to ensure grid operation (voltage and
frequency stability). These occur for each RES connection to
the grid. The grid operator (Electric Utility) has also the
possibility to distribute this cost if multiple RES connect to the
same infrastructure. Furthermore it is possible to avoid or
postpone grid investments or costly transmission lines with
higher capacity through RES in certain network segments.
These costs are usually covered by the Electric Utility but
there is a high tendency to pass these costs to RES Operators,
as well as consumers.
1. (Substation) sizing costs
2. New required or relocated substation costs
3. Equipment costs such as additional or advanced
a. Protection equipment
b. Capacitor banks
c. Voltage equipment
3) Operation and maintenance costs:
These ongoing costs are associated with the operation and
maintenance of the new grid connections, the grid upgrades
and its required equipment.
1. Short-term
a. Leased lines for limited time
2. Long-term
a. Average transport costs for per Energy Product
C. Benefits
The Benefits are derived through the charge of transportation
fees between defined market participants:
1. In order to cover the grid connection costs, both the
Regulator and Electric Utility can charge the RES
Operator certain fees such as permitting fees and
engineering fees. In most cases the RES Operators
also have to consider costs for equipment and
necessary lines to connect to the grid. All costs
should be included in the feasibility study of an RES
2. In order to cover the grid upgrade costs electrical
utilities try to engage RES operators with thresholds
in feed-in tarrifs or additional fees in the grid
connection costs. New partnerships are founded
between Electric Utilities and RES Operator in order
to actively integrate the RES in the long-term grid
planning to avoid and postpone grid investments.
3. In order to cover operation and maintenance costs
there are different transport costs depending on short-
term or long-term Energy Products. Spot markets
costs, like small tradings or routings of Energy
Products through a grid infrastructure can be charged
by transaction. Moreover lines could be leased for a
limited period of time.
Long-term investments like grid upgrade costs or
building costs can be distributed equally and can be
attached with a minor transport fee for each Energy
Product (forward market). This could help to justify
long-term investments in advanced technologies
always considering that not only the customer is
paying for this change.
Clear responsibilities described in this classification scheme
build on the Transactional Energy Framework will help to
identify challenges, costs and benefits in order to clarify and
create a common understanding with respect to the
transportation of Energy Products.
As the penetration levels of renewables energies such as wind
and solar continue to rise, new economic and technical control
mechanisms will be required to ensure market optimization
and grid reliability. Transactive Energy is seen as a potential
solution to these concerns.
Transactive Energy is still years away from becoming a reality
as both market acceptance and technical maturity need to be
reached. The above classification of renewable energy costs
and benefits according the GridWise Architecture Council’s
Transactive Energy framework can serve as a foundation for
future quantification of each cost and benefit.
Daniel Shereck and Tugcan Sahin would like to thank our
professor Saleh Saleh, at the University of New Brunswick,
for his instruction during the writing this paper.
Basic format for periodicals:
[1] E.F. Camacho, T. Samad, M.G. Sanz and I. Hiskens. (2011). Control for
Renewable Energy and Smart Grids. Journal. IEEE CSS. [Online]. pp 1
[2] L. Guccione and P. Bronski. (2014, February). Will the Electricity Grid
Become Optional? Rocky Mountain Institute. United States. [Online].
[3] (2011). Disruptive Challenges: Financial Implications and Strategic
Responses to a Changing Retail Electric Business. Edison Institute.
Washington, DC. [Online]. Available:
[4] (2013, October). How to lose half a trillion euros. The Economist.
United States. [Online]. Available:
[5] K. Larsen and J. Russo. (2013). Integrating Renewable Electricity on the
Grid. American Physics Society. Washington, DC. [Online]. Available:
[6] J. Wellinghoff (2014, September). FEDER AL ENERGY
Washington, DC. [Online]. Available:
[7] (2013, October). Gridwise Transactive Energy Framework. Gridwise
Architecture Council. United States. [Online]. Available:
[8] M.Li and J.D. McCalley, “Influence of Renewable Integration on
Frequency Dynamics”, IEEE Explore, pp. 1, 2012.
[9] NERC Standards, BAL-STD-002-0, Operating Reserves,”
[10] A.V. Meier, “Integration of Renewable Generation in California,”
California Institute for Energy and Environment, pp.2 2012.
[11] (July, 2013). Sunday, Solar Sunday: Germany's Recent Solar Energy
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Tugcan Sahin (B’08 M’13) received
his B.Eng. degree in information
technology from the Cooperative State
University of Mannheim in 2008 and a
MBA degree in general management, leadership and
communication at the Technical University Munich in
cooperation with the Tsinghua University Beijing and HSG
University St. Gallen. He is currently pursuing his Ph.D.
degree at the University of New Brunswick in Fredericton,
NB, Canada. His research interest includes the development of
new business models and service offerings for electrical
utilities while considering, understanding and measuring the
perceived value for customers.
From 2005 to 2014, he has been for Siemens AG in various
functions and international projects starting with large IT
outsourcing deals through to Smart Grid Strategy Consulting
and Smart Grid Program Implementations.
Mr. Tugcan Sahin’s awards and honors include the Baden-
Württemberg Stipendium and the Bavarian University Award.
Daniel Shereck (B’05) was born in Montreal, Quebec,
Canada, in 1982. He received a B.Eng. in Computer Engineer
with a Minor in Management from McGill University in 2005.
In 2007, he took a masters course at
London Business School on the future of
the telecom industry. In 2014 he began a
Masters degree in Interdisciplinary
studies at the University of New
Brunswick and is expected to complete
this degree in 2015.
From 2006 onwards, he has worked on
various telecom projects including establishing Canada’s first
satellite to cellular company in 2007, to working on the
standardization of vehicle to grid technology (V2G) for the
European Union’s 7th Program. From 2012 to 2014, he was
has worked as Consultant with Siemens Canada. During this
time he has worked on a number of Smart Grid initiatives such
as the establishment of an Enterprise Architecture Committee
to providing strategy on the Advanced Metering Infrastructure
project at NB Power. His research interests include new
business models for utilities as well as new market
mechanisms for the integration of renewables into the electric
Mr. Daniel Shereck was a recipient of a Canadian Governor
General’s award in 2000 and in 2006 his work at OmniGlobe
Networks was featured in IEEE Spectrum Magazine as one of
the top jobs in electrical engineering.
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Integration of high volume (high penetration) of photovoltaic (PV) generation with power grids consequently leads to some technical challenges that are mainly due to the intermittent nature of solar energy, the volume of data involved in the smart grid architecture, and the impact power electronic-based smart inverters. These challenges include reverse power flow, voltage fluctuations, power quality issues, dynamic stability, big data challenges and others. This paper investigates the existing challenges with the current level of PV penetration and looks into the challenges with high PV penetration in future scenarios such as smart cities, transactive energy, proliferation of plug-in hybrid electric vehicles (PHEVs), possible eclipse events, big data issues and environmental impacts. Within the context of these future scenarios, this paper reviewed the existing solutions and provides insights to new and future solutions that could be explored to ultimately address these issues and improve the smart grid’s security, reliability and resiliency.
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Over the last decades, the hierarchical and centrally controlled approach of existing power distribution is moving toward a smart power grid paradigm. Nowadays, consumers are becoming part of the solution in the power system operation problem, where the role of aggregator and demand response are being legalized in several countries. Therefore, technical features and economic aspects of the consumer's participation in demand response programs, namely through an aggregator, require intensive modeling and validation. The main contribution of this thesis is modeling of an aggregator that is responsible for demand response programs and respective events implementation and validation by simulating, emulating, and performing actual control of devices. The proposed approach also considers both consumer participation in demand response events and the individual appliances used to obtain the required demand reduction. In the scope of the main contribution, the DEEPDISEM platform, designed and developed in this thesis, provides support to the demand response implementation in the context of intelligent energy management. DEEPDISEM integrates realistic network models using real-time simulation, hardware-in-the-loop, several loads and distributed generation emulators, and real devices. The diversity of capabilities and features of DEEPDISEM make it a powerful tool to assay the demand response models by providing actual load management in the end-users. To run the realistic simulation, OP5600 is used as the real-time simulator machine to control laboratory emulators from the simulation environment and obtain realistic results. Also, DEEPDISEM utilizes several distributed programmable logic controllers and single-board computers for decentralized management, running linear programming, and intelligent approaches like decision trees and rule-based decisions. Besides this, several key contributions are gathered together to accomplish and support the core contribution. These key contributions are classified in two main categories: a) power and energy system, and b) computer science. The key contributions related to the power and energy systems include demand response programs definition, resource aggregation, demand response gathering, distributed generation and demand response scheduling, renewables integration, local markets and communities, and irrigation management. The key contributions related to computer science consist of distributed control and intelligent applications. All these key contributions in both categories are validated through Supervisory Control And Data Acquisition systems, real-time simulation, laboratory emulation, and case studies. The presented approach in this thesis is supported through various developed methods, aiming at practical features of demand response implementation and validation through a diversity of case studies, both simulated and comprising actual physical equipment. Various models, decision-making methods, and applications, from an isolated farm to a large aggregator (i.e., 220 consumers and 86 producers) with several types of end-users, have been tested using the DEEPDISEM platform. The results of DEEPDISEM show significant energy savings and cost reductions for both the aggregator and the end-user. Also, the results demonstrate the actual impact of demand response implementation through actuation in the actual devices. Thus, the feasibility of field implementation and widespread of innovative demand response models, which used to be mostly done by simulation models, disregarding the actual impact in the physical devices, was achieved.
This thesis presents the design, analysis, and validation of a hierarchical transactive control system that engages demand response resources to enhance the integration of renewable electricity generation resources. This control system joins energy, capacity and regulation markets together in a unified homeostatic and economically efficient electricity operation that increases total surplus while improving reliability and decreasing carbon emissions from fossil-based generation resources. The work encompasses: (1) the derivation of a short-term demand response model suitable for transactive control systems and its validation with field demonstration data; (2) an aggregate load model that enables effective control of large populations of thermal loads using a new type of thermostat (discrete time with zero deadband); (3) a methodology for optimally controlling response to frequency deviations while tracking schedule area exports in areas that have high penetration of both intermittent renewable resources and fast-acting demand response; and (4) the development of a system-wide (continental interconnection) scale strategy for optimal power trajectory and resource dispatch based on a shift from primarily energy cost-based approach to a primarily ramping cost-based one. The results show that multi-layer transactive control systems can be constructed, will enhance renewable resource utilization, and will operate in a coordinated manner with bulk power systems that include both regions with and without organized power markets. Estimates of Western Electric Coordionating Council (WECC) system cost savings under target renewable energy generation levels resulting from the proposed system exceed US$150B annually by the year 2024, when compared to the existing control system.
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