User flexibility aware price policy synthesis for smart grids

In order to optimally manage a modern electricity distribution network, peaks in residential users demand should be avoided, as this can reduce energy and network asset management costs. Furthermore, this must be done without compressing residential users demand. To this aim, in a demand response setting, residential users are given a price policy, which economically motivates them to shift their loads in order to achieve this goal. However, if the price policy for all users is similar, this demand response may result in simply shifting the demand peaks (peak rebound), leaving the problem unsolved. In this paper we propose a novel methodology which i) for each network substation s, automatically computes the desired power profile to be kept in order to optimally manage the network itself, ii) for each network substation s, automatically synthesizes individualized price policies for residential users connected to s, so that s is kept at the desired profile. Note that price policies individualization avoids the peak rebound problem, as different users have different low tariff areas. Furthermore, our methodology measures the flexibility of a residential user as the capacity needed by a home energy storage system (e.g., a battery) to always follow the given price policy, thus mitigating residential users discomfort. We show the feasibility of our approach on a realistic scenario taken from an existing medium voltage Danish distribution network.