Market-based Power Dispatch and Pricing Using Stochastic Model Predictive Control

Abstract

We propose a decentralized electricity dispatch and pricing mechanism that enables a grid with intermittent energy sources to dispatch energy within a user-specified risk bound. This approach allows each power provider to specify the probability density function of the amount of energy that it has to generate in the future. As a result, a power provider can quantitatively limit the risk of power shortage by imposing chance constraints in a decentralized manner. We demonstrate the capabilities of the proposed approach by simulations using real data.