Energy Collectives: A Community and Fairness Based Approach to Future Electricity Markets

While power system organization has evolved from a hierarchical structure to a more decentralized model, electricity markets are still not up to date with the ongoing transformation toward more consumer-centric economies. As information and communication technologies are broadly adopted, they allow prosumers to have a more proactive role in power system operation. This work introduces the concept of energy collectives, as a community-based electricity market structure. We find that when prosumers are allowed to share energy at community level, the overall electricity procurement for the community reflects prosumers' preferences. We show that community members can be influenced by a supervisory third-party in charge of interfacing with the market and system operator and of guaranteeing the collective common agreements. We simulate a number of test cases and apply typical principles from analysis of communication networks and distributed systems to assess community fairness.

I. Introduction

The massive deployment of renewable generation challenges common practice in power system operation, not only in the form of large scale power plants, but also of Distributed Energy Resources (DERs). Simplifying DERs as load reduction for electricity consumers may have been acceptable at low penetration levels. However, as their installed capacity rises, DERs enhance end-users flexibility. If appropriately controlled, this flexibility can reveal strategic opportunities for supply and demand at distribution level [1].