Securing Energy Equity With Multilayer Market Clearing

Abstract

Energy equity has been quickly gaining attention as policymakers seek to place “Clean Energy for ALL” at the center of the low-carbon energy transition. Power system researchers have started to build the groundwork for incorporating energy equity into grid modernization. However, existing research has mostly focused on energy equity from a policy perspective, such as concept clarifications and tariff designs for residential customers. Little effort has been devoted to discussing energy equity in wholesale markets and to reflecting energy equity in electricity price with technical models. To the best of our knowledge, this paper presents the first study attempting to understand and implement energy equity consideration within a physically constrained electricity market-clearing model. First, we identify and discuss several concerns regarding energy equity in the existing locational marginal pricing (LMP) model. Then, we propose a multilayer framework reflecting energy equity in LMPs. Finally, the proposed framework is elaborated via a modified PJM 5-bus system and demonstrated with the WECC 179-bus system.