MechanismDesign g fortheSmartGrid for the Smart Grid

ValentinRobu,HarryRose,EnricoGerding,Sebastien Stein, GeorgiosChalkiadakis,RamKota, G i Ch lki d ki R K t AlexRogersandNicholasR.Jennings

UniversityofSouthampton
6th April2011

Outline
EnergyDomain SmartGrid iDEaSProject iDE S P j MechanismDesign g
Demandaggregationinthesmartgrid Electric vehicle charge pricing Electricvehiclechargepricing

OtherworkandConclusions

iDEaS :IntelligentDecentralisedEnergyAwareSystems

Developmentandgrowthsincethestartof theindustrialrevolutionduetofossilfuels the industrial revolution due to fossil fuels

FossilFuels
Coal(1800+) ( ) Oil(1900+) Gas (1960+) Gas(1960+)

Concentrated solar Concentratedsolar energycollectedover millionsofyears illi f

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Continueduseoffossilfuelsischallengedby threeimpendingfactor three impending factor

Finiteresources
Demandoutstrips p productioncapacity

Energy security Energysecurity

Resourcesarenot evenlydistributed l di t ib t d

ClimateChange
Increasingatmospheric CO co ce t at o CO2concentration iDEaS :IntelligentDecentralisedEnergyAwareSystems
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Addressingtheseissuesrequirechallenging changesinthewayweuseenergy changes in the way we use energy

80% reduction in CO2 by 2050 80%reductioninCO2by2050
Increasedenergyefficiency throughelectrification h h l f
Transport Heating
2008 Climate Change Act

Lowcarbon
Wind Solar Hydro Nuclear
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iDEaS :IntelligentDecentralisedEnergyAwareSystems

Currentelectricitynetworksarechallenged bytheseproposedchanges by these proposed changes

Ageinginfrastructuredesignedforasmall numberoflargegenerators
Supplyfollowsdemand
Fuel inefficiency Fuelinefficiency Peakdemand Fixed prices Fixedprices

FredSchweppe proposedtheneedforamore dynamicgrid(1978) d i id (1978)

Spotpricingandhomeostaticcontrol iDEaS :IntelligentDecentralisedEnergyAwareSystems
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TheSmartGridrepresentsamodernvision ofadynamicelectricitygrid of a dynamic electricity grid

Imaginethepossibilities:electricityandinformation Imagine the possibilities: electricity and information flowingtogetherinrealtime,nearzeroeconomic lossesfromoutagesandpowerqualitydisturbances,a losses from outages and power quality disturbances a widerarrayofcustomizedenergychoices,suppliers competinginopenmarkets toprovidetheworld sbest competing in open markets to provide the worlds best electricservices,andallofthissupportedbyanew energyinfrastructurebuiltonsuperconductivity, energy infrastructure built on superconductivity, distributedintelligenceandresources,cleanpower,and thehydrogeneconomy. the hydrogen economy.
US Department of Energy (2009)

iDEaS :IntelligentDecentralisedEnergyAwareSystems

TheiDEaSProjectisexploringroutesto makethissmartgridareality make this smart grid a reality

iDEaSProject:Intelligent gy y DecentralisedEnergyAwareSystems
www.ideasproject.info

Threeyearprivatelyfundedbyindustry
4 academics 4academics 5researchfellows 6PhDstudents

iDEaS :IntelligentDecentralisedEnergyAwareSystems

Outline
EnergyDomain SmartGrid iDEaSProject iDE S P j MechanismDesign g
Demandaggregationinthesmartgrid Electric vehicle charge pricing Electricvehiclechargepricing

OtherworkandConclusions

iDEaS :IntelligentDecentralisedEnergyAwareSystems

Smartmetersareakeypartofthesmart grid,facilitatingtwowayinformationflow grid facilitating two way information flow

Smartmetersprovideutilitieswith p gy muchbetterpredictionsofenergy consumption
Trade more effectively Trademoreeffectively Individualsalwayshavemore informationonfuturedemand i f ti f t d d

Canmechanismdesignhelpelicit C h i d i h l li it thisadditionalinformation?
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Wemodelanumberofindividualhomes andanenergyaggregatorwhobuysenergy and an energy aggregator who buys energy

Buys

units at price

EnerInc iDEaS :IntelligentDecentralisedEnergyAwareSystems

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Wemodelanumberofindividualhomes andanenergyaggregatorwhobuysenergy and an energy aggregator who buys energy

Ifunitsactuallyused.
Buyorsellingdifferenceinthebalancingmarket y g g Balancingmarketbuysat Balancing market sells at Balancingmarketsellsat

Chooseamounttobuyinforwardmarketsto minimisetotalcost

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Canweelicitbetterestimatesfromthe consumersandsharethebenefits? consumers and share the benefits?

Consumersprovideestimateof p futureconsumption D i Doingsoincursacost i

Consumerscanmisreportifitisin p theirinteresttodoso.
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Simplesolutionistoevenlyallocatedshare ofthesavingstoeachconsumer. of the savings to each consumer

Savings made Share distributed Consumers reports Aggregators beliefs Individual consumptions

Properties

Number of consumers

TruthtellingisaNashequilibrium Stronglybudgetbalanced Doesntrewardmorepreciseestimates iDEaS :IntelligentDecentralisedEnergyAwareSystems

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Usesphericalscoringruletoderivearule thatrewardpreciseestimates. that reward precise estimates

Actual consumption Consumers reports

Properties
Maximise score by truthfully reporting Maximisescorebytruthfullyreporting Needstobescaledappropriately iDEaS :IntelligentDecentralisedEnergyAwareSystems
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Usesphericalscoringruletoderivearule thatrewardpreciseestimates. that reward precise estimates

Share distributed Savings made

Properties

Maximum precision All other th scores

Truthtellingisstrictlydominant Moreaccurateandpreciseestimatesrewarded Weaklybudgetbalanced iDEaS :IntelligentDecentralisedEnergyAwareSystems

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Althoughtruthtellingisdominant consumersstillneedtostrategiseoverthe consumers still need to strategise over the precisionestimatethattheyactualgenerate

Weempiricallyfindtheequilibriumusing iteratedbestresponse
Ateachroundoftheiterationweassume At each round of the iteration we assume opponentsprecisionsarefixed We optimise the choice of precision against these Weoptimisethechoiceofprecisionagainstthese fixedopponents We repeat until convergence Werepeatuntilconvergence

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Ourmechanismelicitsmoreprecise estimatesandbenefitsbothparties. estimates and benefits both parties

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Ourmechanismelicitsmoreprecise estimatesandbenefitsbothparties. estimates and benefits both parties

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Manyotherapplicationsrequireelicitationof preciseandaccurateestimates precise and accurate estimates

Virtualpowerplants(VVP)
Multiplesmallscalerenewable p generatorscometogetherto p participatewithinthegrid. p g
Morepredictablegeneration improvesgridplanningandwould reduceexposureinbalancing market Combinewithelectricvehicles (estimatesofstorageandfeedin).

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Outline
EnergyDomain SmartGrid iDEaSProject iDE S P j MechanismDesign g
Demandaggregationinthesmartgrid Electric vehicle charge pricing Electricvehiclechargepricing

OtherworkandConclusions

iDEaS :IntelligentDecentralisedEnergyAwareSystems

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Electricvehiclesareakeycomponentofthe smartgridreducingrelianceonoil smart grid reducing reliance on oil

RangeextendedEVandpluginhybridEV
ChevroletVolt ToyotaPrius plugin

iDEaS :IntelligentDecentralisedEnergyAwareSystems

Thelocaldistributionnetworkmaybethe keylimitingfactorintheirdeployment key limiting factor in their deployment

LocalTransformer (limitedmaximum capacity)

Localtransformeristypicallyundersized EVrepresentsignificantextraload Home 24kWhover24hours,EV 32kWhover8hour

iDEaS :IntelligentDecentralisedEnergyAwareSystems

Twocurrentmethodsareusedtoattempt avoidoverloadinglocaldistributionnetwork avoid overloading local distribution network

TOUtarriff
Offercheapovernightchargingtodiscourage p g g g g peaktimecharging

Scheduling
Collectrequirementsandautomaticallyschedule

Canweusemechanismdesigntoovercome theseproblems?
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Weconsideramodelofmodelthissetting withdiscreteunitsofcharge with discrete units of charge

units of charge required i d

units of charge available

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Nonincreasingmarginalvaluationsoccur naturallyinasettingwithREEVandPHEV naturally in a setting with REEV and PHEV

Dualfuelpricing:
Priceoffuel(in/litre), Internalcombustionengineefficiency(miles/litre), Electricefficiency(inmiles/kWh), Distanceprobabilitydensityfunction,

Expectedutilityforgivencharge(inkWh)givenby:

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Asimplegreedyallocationrulewithsecond pricepaymentsisnotDSICinthissetting h
1

U1 = (10=+10) 2 = 8 = 7 ( 1 4) 5 2 U

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Toaddressthisusegreedyto`preallocate butwealso`burnunits(eitherimmediately b l `b ( h d l oron departure) orondeparture)

PreserveDSICwithoutmodeloffutureevents bynotallocatingsomeitems:
Preallocate using greedy Pre allocateusinggreedy Burnwhenthemarginalvalueoftheunitis smallerthanthemarginalpaymentoftheunit smaller than the marginal payment of the unit Immediateburning Ondepartureburning iDEaS :IntelligentDecentralisedEnergyAwareSystems

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Wegeneraterepresentativevehicleuse statisticsfromaUKEVtrial statistics from a UK EV trial

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Wegeneraterepresentativevehicleuse statisticsfromaUKEVtrial statistics from a UK EV trial

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Wegeneraterepresentativevehicleuse statisticsfromaUKEVtrial statistics from a UK EV trial

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OnlineMechanismDesignforDynamic ElectricVehicleCharging l h l h
Variableratecharging bl h
Pricefastchargers g appropriately

Redistribute payments while Redistributepaymentswhile maintainingincentives Dynamicdistributedmodel

Vehiclesreportlocation, p , destinationavailablecharge& requirements q iDEaS :IntelligentDecentralisedEnergyAwareSystems

Formoredetails,seethepublications below: below:

Rose,H.,Gerding,E.,andRogers,A. Mechanism DesignforAggregatedDemandPredictioninthe SmartGrid. AAAI2011(toappear). Gerding,E.,Robu,V.,Stein,S.,Rogers,A.and Je Jennings,N.R. OnlineMechanismDesignforElectric gs, O e ec a s es g o ect c VehicleCharging.AAMAS2011(toappear)

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Conclusions
Thesmartgridisessentialforasustainable energyfuture
Efficient use and pricing of electricity is essential Efficientuseandpricingofelectricityisessential tothisvisiongiventheincreaseddemand Many opportunities for mechanism design to Manyopportunitiesformechanismdesignto influencethedesignofthisnewgrid

Seeprojectwebsiteformoredetailsand p publications:
www.ideasproject.info iDEaS :IntelligentDecentralisedEnergyAwareSystems
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