A Dynamic Tariff Market Design for Electrical Energy in a Distribution System

Abstract

The work in this thesis is motivated by the need to design an energy marketplace for use in a Dynamic Distribution System. The Dynamic Distribution System is a proposed techno-economic approach to increased penetration of distributed energy resources in the electrical energy system. Distributed energy resources pose new challenges and opportunities to traditional electric energy business models. This research reveals proposed business model alternatives that provide insight into possible roles of a distribution system marketplace. Further insights are provided by existing wholesale energy markets and studies of dynamic pricing in retail energy markets. First, the proposed marketplace rules for a Dynamic Tariff Distribution Market are defined including the network configuration, communication processes, actor participation, and market processes. The network includes nodes, tariffs, and linkages. The Dynamic Tariff Distribution Market protocols and processes seek to provide all actors their network- and time-specific energy price, comprising the unit cost of energy, energy loss adjustment, and the impact of system externalities. Second, a method for simulating the Dynamic Tariff Distribution Market is provided. This section describes specific considerations for simulating and implementing the marketplace. The simulation includes market rules and processes, methods for implementing node behavior models, and methods for implementing tariff structures. The simulation is then used to examine suggested actor behavior models and proposed tariff structures. Case studies are provided to demonstrate marketplace interactions and examine behavior models and tariff structures. Finally, this thesis provides suggested areas for future research and development of the Dynamic Tariff Distribution Market. This includes physical implementation, more flexible modeling, improved behavior models, and advanced market rules.