Decentralized, agent-mediated participation of flexible thermal loads in electricity markets

Decentralization of market architecture, accurate expression of demand flexibility in the bidding process and minimum engagement from human users constitute major challenges towards the achievement of direct participation of the demand side in electricity markets. An approach to deal with these challenges in an integrated fashion is proposed in this paper. A decentralized pool market mechanism capturing the inter-temporal character of demand flexibility in the market clearing process, reducing the computational and communication requirements and respecting the consumers' privacy concerns is developed, based on decomposition principles and an original price update algorithm. Automated participation of the demand side in this decentralized market and encapsulation of its complex, inter-temporal characteristics in the bidding process is achieved through an agent-mediated scheme. Electro-thermal loads with electric heat pump systems and different flexibility scenarios (also including thermal storage deployment) have been used in order to exemplify this scheme and benefits emerging from their market participation are quantified and analyzed.