Energy Access in Community Microgrids based on Decentralized Real-time Pricing

Abstract

Non-dispatchable sources like PV and their increased adoption in emerging markets have made it extremely challenging to stabilize these systems. Enormous variations in the supply-demand ratio on a daily basis, point to the need for real-time market structures. Today's pricing mechanisms such as Locational Marginal Prices (LMPs) and Distribution Locational Marginal Prices (DLMPs) are highly dependent on real-time knowledge of system topology, grid states and high-speed communication infrastructure. These mechanisms are not yet widely adopted and are extremely prone to failure in the event of damage to the communication infrastructure or inaccurate system models. A novel decentralized pricing architecture is presented here which relies on frequency- a ubiquitous signal, to establish real-time prices. This ensures that the real-time price can be observed at every node without any communication infrastructure, making it extremely resilient. The approach also succeeds in generating common rules for control and operation of inverter-based as well as conventional sources. The approach integrates the transactive and operational aspects of the grid and leverages supply-demand flexibility, while ensuring the lowest cost of operation.