Dynamic Subsidy Method for Congestion Management in Distribution Networks

Dynamic subsidy (DS) is a locational price paid by the distribution system operator (DSO) to its customers in order to shift energy consumption to designated hours and nodes. It is promising for demand side management and congestion management. This paper proposes a new DS method for congestion management in distribution networks, including the market mechanism, the mathematical formulation through a two-level optimization, and the method solving the optimization by tightening the constraints and linearization. Case studies were conducted with a one node system and the Bus 4 distribution network of the Roy Billinton test system with high penetration of electric vehicles and heat pumps. The case studies demonstrate the efficacy of the DS method for congestion management in distribution networks. Studies in this paper show that the DS method offers the customers a fair opportunity to cheap energy prices and has no rebound effect.