[Paper Review] An Interactive Transactive Energy Mechanism Integrating Grid Operators, Aggregators and Prosumers

Peng Hou, Guangya Yang+3 more|arXiv (Cornell University)|Dec 15, 2019

Smart Grid Energy Management20 references4 citations

TL;DR

This paper proposes a novel transactive energy framework that integrates grid operators, aggregators, and prosumers through a two-tiered pricing mechanism to balance economic incentives with grid security. By enabling aggregators to coordinate prosumers via a price adder when grid constraints arise, the framework ensures grid stability while maintaining prosumers' cost savings and self-sufficiency goals, as validated through simulation results.

ABSTRACT

With the decreasing cost of solar photovoltaics (PV) and battery storage systems, more and more prosumers appear in the distribution systems. Accompanying with it is the trend of using home energy management systems (HEMS). HEMS technologies can help the households to schedule their energy prosumption with aims such as reduced electricity bills or increased self-sufficiency. However, their economic-driven operation can affect the grid security. Therefore, it is paramount to design a framework that can accommodate the interests of the key stakeholders in distribution systems, namely the grid operators, aggregators, and prosumers. In this paper, a novel transactive energy based operational framework is proposed. On the upper level, aggregators will interact with distribution grid operators through transactive approach to ensure the grid interests are satisfied. If there are grid issues, the aggregator will interact with the prosumers through a designed price adder. The simulation results indicate that the proposed framework can effectively accommodate the prosumers operation in distribution systems while keeping the key stakeholders interests.

Motivation & Objective

• To address the growing challenge of grid instability caused by decentralized prosumers with solar PV and battery storage.
• To reconcile conflicting interests among grid operators, aggregators, and prosumers in distribution systems.
• To design a transactive energy mechanism that ensures grid security while preserving prosumers' economic benefits.
• To enable coordinated decision-making through price signals that reflect grid constraints and operational needs.

Proposed method

• A hierarchical transactive energy framework is designed with grid operators at the top, followed by aggregators, and prosumers at the bottom.
• Aggregators interact with grid operators using a transactive pricing mechanism to ensure grid constraints are met.
• When grid constraints are detected, aggregators apply a price adder to influence prosumer behavior via their Home Energy Management Systems (HEMS).
• The price adder is dynamically adjusted based on system congestion and operational needs to guide prosumers toward load shifting or curtailment.
• The framework uses a market-clearing mechanism that aligns prosumer scheduling with grid security and economic efficiency.
• Simulations are conducted to evaluate the framework’s performance under various prosumer penetration and grid stress scenarios.

Experimental results

Research questions

• RQ1 How can grid operators effectively manage increasing prosumer participation without compromising system security?
• RQ2 What pricing mechanism enables aggregators to coordinate prosumers in response to grid constraints?
• RQ3 How can prosumers maintain economic benefits while complying with grid requirements?
• RQ4 What is the impact of dynamic price signals on load shaping and self-sufficiency in distribution networks?

Key findings

• The proposed framework successfully maintains grid security under high prosumer penetration by dynamically adjusting price signals.
• Prosumers achieve significant cost savings and improved self-sufficiency through coordinated scheduling via HEMS.
• The price adder mechanism effectively shifts prosumer load during congestion, reducing grid stress without compromising economic incentives.
• Simulation results confirm that the framework balances stakeholder interests across all levels of the distribution system.