Consensus-based Nodal Pricing Mechanism for Automated Demand Response Considering Congestion Management on Distribution Networks

This paper investigates a consensus-based nodal pricing mechanism for incenting automated demand response in the deregulated market environment. These small-scale customers are autonomously managed by automated demand response (DR) controllers, which are capable of scheduling user's load devices to follow a day-ahead 24h price signal from electricity distribution companies (EDC). First, an alternating current optimal power flow (ACOPF) on the distribution network is formulated considering the participation of automated DR. Then, a consensusbased approach is exploited to adjust the nodal price and DR profile for each customer using primal-dual decomposition. The proposed mechanism is compared with a day-ahead pricing (DAP) program on a test distribution network and numerical results have shown promising performance in supporting the congestion management on the distribution grid.