Impact of imperfect foresight on the optimal DER deployment, remuneration and policy

Kim, Jip; Bialek, Sylwia; Ünel, Burçin; Dvorkin, Yury

doi:10.1016/j.apenergy.2022.119885

Cited by 5 publications

(6 citation statements)

References 24 publications

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“…Table 1 shows the outcomes for Case 4 under different DER investment costs (

C_i^{\textnormal {inv}}

). We use the cost projections from[11, 39], such that the DER investment cost reduces by 10% in 2025, by 25% in 2030, and by 54% in 2050. Each investment cost scenario is run for optimistic and pessimistic beliefs about the hosting capacity and consumer information, as explained in Section 4.…”

Section: Case Studymentioning

confidence: 99%

“…However, this model does not take into account energyand capacity-based incentives for DERs and associated consumer surcharges. Other information problems pertaining to uncertainties in electricity markets, renewable generation, and future DER remuneration are studied in [11,20,21]. Similarly, information problems due to language barriers in the population and their impact on DER adoption are discussed in the equity-centered analysis of grid infrastructure limits in [22].…”

Section: Literature Reviewmentioning

confidence: 99%

“…The deployment of DERs in power systems introduces new actors to this dilemma, exacerbating the existing information problems [8]. DER-specific information problems can originate either from the stochastic variables in electricity markets (solar and wind generation on a particular day or uncertainty in energy and/or DER remuneration tariffs [11]) or from the propriety information of different stakeholders [7]. While the former type of information problems can never be completely resolved and leads to limited competitive advantage, the latter type not only creates competitive advantages in electric power distribution, but also generates incentives for the stakeholders to extract information rent based on this advantage [7].…”

Section: Introductionmentioning

confidence: 99%

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Value of distribution system information for DER deployment

Khan

Ünel²,

Dvorkin

2023

IET Generation Trans & Dist

Self Cite

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Integration of Distributed Energy Resources (DERs) in power systems exacerbates the existing information problems between power utilities and regulators. DER policies oblivious to the trilemma of information asymmetry between power utilities, DER aggregators, and regulators result in distorted price signals to DER investors, and socially inefficient DER roll‐out. Therefore, in this paper, a game‐theoretic approach is proposed for modeling information asymmetry in distribution network information and consumer data between the DER aggregators and the power utilities. The proposed framework is based on Single Leader Single Follower (SLSF) games, reformulated as Mathematical Programs with Equilibrium Constraints (MPECs), and solved using the Scholtes's relaxation technique. The results, based on the 7‐bus Manhattan power network, show that unless the DER aggregators have complete information about the distribution network characteristics, the welfare along with the realized installed capacity of DERs in the system decreases. Moreover, progressively decreasing DER investment costs alleviate the effects of information asymmetry, suggesting that early adopters face disproportionately high welfare losses attributed to incomplete information between the DER stakeholders. Hence, policy interventions to alleviate the rampant information problems are imperative to ensure an optimal DER roll‐out.

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“…Table 1 shows the outcomes for Case 4 under different DER investment costs (

C_i^{\textnormal {inv}}

Section: Case Studymentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Value of distribution system information for DER deployment

Khan

Ünel²,

Dvorkin

2023

IET Generation Trans & Dist

Self Cite

View full text Add to dashboard Cite

show abstract

“…Table 1 shows the outcomes for Case 4 under different DER investment costs (C inv i ). We use the cost projections from [11,39], such that the DER investment cost reduces by 10% in 2025, by 25% in 2030, and by 54% in 2050. Each investment cost scenario is run for optimistic and pessimistic beliefs about the hosting capacity and consumer information, as explained in Sec.…”

Section: Effect Of Der Investment Costs On Information Asymmetrymentioning

confidence: 99%

“…However, this model does not take into account energy-and capacity-based incentives for DERs and associated consumer surcharges. Other information problems pertaining to uncertainties in electricity markets, renewable generation, and future DER remuneration are studied in [11,20,21].…”

Section: Introductionmentioning

confidence: 99%

Value of Distribution System Information for DER Deployment

Khan

Ünel

Dvorkin

2022

Preprint

View full text Add to dashboard Cite

Integration of Distributed Energy Resources (DERs) in power systems exacerbates the existing information problems between power utilities and regulators. DER policies oblivious to the trilemma of information asymmetry between power utilities, DER aggregators, and regulators result in distorted price signals to DER investors, and socially inefficient DER roll-out. Therefore, in this paper, we propose a game-theoretic approach for modeling information asymmetry in distribution network information and consumer data between the DER aggregators and the power utilities. The proposed framework is based on Single Leader Single Follower (SLSF) games, reformulated as Mathematical Programs with Equilibrium Constraints (MPECs), and solved using the Scholtes’s relaxation technique. Our results, based on the 7-bus Manhattan power network, show that unless the DER aggregators have complete information about the distribution network characteristics, the welfare along with the realized installed capacity of DERs in the system decreases. Moreover, progressively decreasing DER investment costs alleviate the effects of information asymmetry, suggesting that early adopters face disproportionately high welfare losses attributed to incomplete information between the DER stakeholders. Hence, policy interventions to alleviate the rampant information problems are imperative to ensure an optimal DER roll-out.

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