Synergy Among Flexible Demands: Forming a Coalition to Earn More from Reserve Market

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Abstract

We address potential synergy among flexible demands and how they may earn more collectively than individually by forming a coalition and bidding to the reserve market. We consider frequency-supporting ancillary service markets, particularly the manual Frequency Restoration Reserve (mFRR) market. The coalition of flexible demands provides more reliable mFRR services, where in comparison to individual demands, is penalized less for their potential failure and is paid more for their successful activation. This synergy effect is quantified as a function of the number of homogeneous assets in the coalition. A subsequent payment allocation mechanism using Shapley values is proposed to distribute the total earnings of the coalition among demands, while incentivizing them to remain in the coalition. For our numerical study, we use real price data from the Danish mFRR market in 2022.
Original languageEnglish
Title of host publicationProceedings of IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (IEEE SmartGridComm)
Number of pages5
PublisherIEEE
Publication date2023
ISBN (Print)978-1-6654-5556-5
DOIs
Publication statusPublished - 2023
Event2023 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids - Glasgow, United Kingdom
Duration: 31 Oct 20233 Nov 2023

Conference

Conference2023 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids
Country/TerritoryUnited Kingdom
CityGlasgow
Period31/10/202303/11/2023
SeriesIEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm)
ISSN2474-2902

Keywords

  • Demand-side flexibility
  • Synergy effect
  • Manual frequency restoration reserve
  • Shapley values
  • Payment allocation

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