Dayahead Electricity Pricing for a Heterogeneous Microgrid Under Arbitrary Utility and Cost Structures

In this paper, we consider the dayahead load and supply allocation problem in an electrical microgrid, which consists of a system manager, consumers, and suppliers. We do not impose any mathematical, operational, and economic assumptions on the consumers and suppliers other than restricting them to have a finite number of load and supply schedules. For example, a consumer can have arbitrary forms of flexibilities in its demand, such as deferrability or intermittence, and the user can choose from a set of predetermined load allocations that represent these flexibilities. Thus, our system model can accommodate heterogeneous user requirements and constraints in the same problem formulation. Under this system model, we formulate a welfare maximization problem, and derive a distributed primal-dual pricing algorithm. In our algorithm, the system manager generates prices for the load and supply allocations of the users, and given these prices, the users independently choose the schedules to their best operational and economic interests. Furthermore, the pricing algorithm incentivizes the users so that their decisions benefit the system performance, and it achieves the optimal load and supply allocation. Finally, we study the algorithm's performance via simulations and demonstrate how the demand-side flexibilities are utilized for the system's benefit.