Design of Distribution Tariffs for Energy Hub Networks to Reduce Carbon Emissions

Utilizing demand-side flexibility provides a viable, cost-efficient and low-carbon alternative to standard grid reinforcement. Energy hubs can provide such a flexibility by leveraging both electrical and thermal grids. This work proposes a novel pricing model for distribution tariffs to fulfill network-wide objectives, while incentivising energy hubs to participate in a demand side flexibility scheme. In the first step, we formulate the optimization of the hub network and propose a novel approach to quantify the flexibility potential of the hubs. The energy hubs then provide the operator with their projected load and flexibility potential for the next day. Subsequently, the operator designs day-ahead tariffs to utilize this flexibility. The tariff incorporates the objectives of the network operator, reduction of carbon emissions in this study, while minimizing the energy costs. Finally, the energy hubs respond to the tariffs using a receding horizon controller to minimize the energy cost over the next day by exploiting building flexibility and both grids. An extensive numerical study on an network of 3 hubs with buildings of different sizes shows that the proposed pricing model can significantly reduce the carbon emissions with a low energy cost trade-off.