Strategic Bidding and Compensation Mechanism for a Load Aggregator With Direct Thermostat Control Capabilities

This paper proposes bidding strategies and compensation mechanisms for a load aggregator (LA) that implements the direct thermostat control (DTC) program. By joining the DTC program, residential consumers allow their house temperature to vary within pre-specified zones at pre-specified hours and be controlled by the LA. They also receive compensation from the LA. The heating/cooling (H/C) load control model is integrated into a two-stage bidding framework. Demand-price bidding curves are derived for the day-ahead market to address price uncertainties. Demand-only bids are derived for the real-time (RT) market. The flexibility of H/C loads is exploited in RT to address uncertainties in thermal-related house characteristics as well as uncertainties in weather and non-H/C load. Two compensation policies are proposed and compared. A case study verifies the proposed method.