Stochastic Investment and Dispatch Optimization of Distributed Energy Resources in a Market Environment

Abstract

Across the world, the electric power systems are experiencing drastic changes mainly due to the technical improvements and cost reductions of technologies such as wind, solar, and batteries, the ambitious climate and energy targets (e.g., net-zero greenhouse gas emission, coal, and nuclear phase-out). All these trends lead to the proliferation of distributed energy resources and contribute to transforming the traditional centralized power system into a more decentralized system. However, both the intermittency nature of the variable generation and the gradual phase-out of favorable policies pose significant challenges to the operations and the investments of distributed energy resources. To better exploit the economic value of distributed energy resources, an aggregator is considered to enable their market participation and integrate the characteristics of diverse resources into a single entity. The research question of what would be the optimal dispatch and the optimal mix of distributed energy resources in a market environment is addressed.