Analysis of a partially decentralized framework for operating future power systems

In future power systems, the Smart Grid technologies will bring in a large number of new entities, which are different from those in the current systems in two major aspects: first, the entities are geographically distributed throughout the system with their detailed information not available to the system operator, and second, the entities tend to autonomously optimize their own benefits. In view of both aspects, it is difficult to use the current centralized framework to operate future systems. In this paper, we present and analyze a new partially decentralized framework and the corresponding mechanisms as one step from the current framework toward the future ones, and the focus is on the real time electricity markets with a dispatch cycle of five minutes. In each dispatch cycle, the system operator posts electricity price forecasts, and individual entities actively respond to the prices to dispatch themselves. The system-wide power imbalance is used as a correction term in the next dispatch cycle to iteratively update the price forecasts, so that system balance is maintained in the long term. The new framework can accommodate the large number of entities without knowing their detailed information, and enable the entities to achieve better economic benefits. Small examples are used to analyze our framework and to compare it with the current one.