Risk assessment of microgrid aggregators considering demand response and uncertain renewable energy sources

Abstract

In power market environment, the growing importance of demand response (DR) and renewable energy source (RES) attracts more for-profit DR and RES aggregators to compete with each other to maximize their profit. Meanwhile, the intermittent natures of these alternative sources along with the competition add to the probable financial risk of the aggregators. The objective of the paper is to highlight this financial risk of aggregators in such uncertain environment while estimating DR magnitude and power generated by RES. This work develops DR modeling incorporating the effect of estimating power at different confidence levels and uncertain participation of customers. In this paper, two well-known risk assessment techniques, value at risk and conditional value at risk, are applied to predict the power from RES and DR programs at a particular level of risk in different scenarios generated by Monte Carlo method. To establish the linkage between financial risk taking ability of individuals, the aggregators are classified into risk neutral aggregator, risk averse aggregator and risk taking aggregator. The paper uses data from Indian Energy Exchange to produce realistic results and refers certain policies of Indian Energy Exchange to frame mathematical expressions for benefit function considering uncertainties for each type of three aggregators. Extensive results show the importance of assessing the risks involved with two unpredictable variables and possible impacts on technical and financial attributes of the microgrid energy market.

Distributed Energy Resource Scheduling with Focus on Demand Response Complex Contracts

“…Focusing on the most recent literature in the VPP field, the work in [24] proposes a method to coordinate the operation of a VPP and voltage regulation to improve the static voltage stability in a distribution network. In [25], a DR participation degree is established to improve the operation of energy storage provided by both battery storage and pumped storage in a microgrid. In [26], incentives are paid for DR to maximize the benefits for energy retailers.…”

Threat Scenarios and Monitoring Requirements for Cyber-Physical Systems of Flexibility Markets

“…As highlighted by [9] and [10], the influence of flexibility on power system security constitutes a research gap, since most existing works only focus on benefits of flexibility utilization. Some works shed light on specific physical threats, such as uncertain customer behavior [11]- [13] or financial threats, for instance the financial risk of aggregators due to the intermittent nature of flexibility assets [14]. Other works investigate cyber threats which are introduced by the application of new smart grid technologies, such as smart meters (SMs) and advanced metering infrastructure [15]- [18].…”

Optimal coordination between PV smart inverters and different demand response programs for voltage regulation in distribution system

“…A more detailed explanation of each DRP is available in Reference 30. Until recently, DR programs are used as a tool to curtail the peak demand and flatten the load profile in order to achieve economic benefits of DR aggregators 31‐33 and to ensure the reliability of the system by maintaining proper reserve power through different DR programs 34‐36 . Also, in Reference 19, the authors have controlled the low voltage distribution feeder voltage using the smart household appliance.…”