Reinventing the utility for distributed energy resources: A proposal for retail electricity markets
Rabab Haider, David D’Achiardi, Venkatesh Venkataramanan, Anurag K. Srivastava, Anjan Bose, Anuradha M. Annaswamy
Abstract
In this paper we propose a distribution-level retail electricity market operated by a Distribution System Operator (DSO), to permit participation for small-scale distributed energy resources (DERs) in a real-time energy market. The retail market is built upon a distributed Proximal Atomic Coordination algorithm, which solves the optimal power flow using the convex nonlinear Branch Flow model, rendering spatially and temporally varying distribution-level Locational Marginal Prices. A numerical study of the market structure is carried out via simulations of the IEEE-123 node network using data from ISO-NE and Eversource in Massachusetts, US. The market performance is compared to existing retail practices, including demand response with no-export rules and net metering. Results show the DSO-centric market increases DER utilization, resulting in lower electricity rates for customers, from $0.114/kWh to $0.0291/kWh. Further, we discuss the policy implications of such a market, including DER participation models at the wholesale level in light of FERC Order 2222, and the evolving business model of the modern utility which is moving from commoditized markets towards performance-based ratemaking.