Grainger CEME Seminars

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The Price of Aggregation: Quantification of the Impacts of Distributed Energy Resources on Electricity Market Efficiency

Event Type
Grainger CEME
4070 ECEB
Oct 7, 2019   3:00 - 4:00 pm  
Khaled Mohammed Alshehri



This presentation focuses on the aggregation of distributed energy resources (DERs) through a profitmaximizing intermediary that enables participation of DERs in wholesale electricity markets. Particularly,
we study the market efficiency brought in by the large-scale deployment of DERs and explore to what extent such benefits are affected by the profit-maximizing nature of the aggregator. We deploy a gametheoretic framework to study the strategic interactions between aggregators and DER owners. The proposed model explicitly takes into account the stochastic nature of the DER supply. We explicitly characterize the equilibria of the game under general assumptions and provide illustrative examples to quantify the efficiency loss due to the strategic incentives of the aggregator. Our numerical experiments illustrate the impact of uncertainty and the total capacity of DER integration on the overall market efficiency.

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