Demand responsive market decision-makings and electricity pricing scheme design in low-carbon energy system environment

Abstract

The two-way interaction between smart grid and customers will continuously play an important role in enhancing the overall efficiency of the green and low-carbon electric power industry and properly accommodating intermittent renewable energy resources. Thus far, the existing electricity pricing mechanisms hardly match the technical properties of smart grid; neither can they facilitate increasing end users participating in the electricity market. In this paper, several relevant models and novel methods are proposed for pricing scheme design as well as to achieve optimal decision-makings for market participants, in which the mechanisms behind are compatible with demand response operation of end users in the smart grid. The electric vehicles and prosumers are jointly considered by complying with the technical constraints and intrinsic economic interests. Based on the demand response of controllable loads, the real-time pricing, rewarding pricing and insurance pricing methods are proposed for the retailers and their bidding decisions for the wholesale market are also presented to increase the penetration level of renewable energy. The proposed demand response oriented electricity pricing scheme can provide some useful operational references on the cooperative operation of controllable loads and renewable energy through the feasible retail and wholesale market pricing methods, and thereby enhancing the development of the low-carbon energy system.