PNNL

Abstract

As power systems cope with increasing amounts of renewable generation, there is an increasing need to engage flexible demand-side resources and distributed energy resources (DERs) into power systems operations. However engagine millions of DERs in a reliable manner into power systems operations can be a challenging problem. Retail markets can facilitate this by providing a platform to aggregate the flexibility of DERs and bid the aggregate flexibility into wholesale markets. However, unlike generators (which can typically be modeled accurately with capacity constraints and ramping limits), most flexible loads have physical dynamics (like air conditioners) that couples their flexibility over time. This coupling could have unintended undesirable consequences (for example, instability and oscillations in prices and other physical quantities). In this paper, we propose a simple model to capture evolution of load flexibility over time and analyze stability of the interconnection between wholesale and retail electricity markets. We prove that under a natural model of flexibility evolution (assuming a constant base load), oscillations cannot occur and prices converge to a unique equilibrium model quickly.