Optimal Penetration of Home Energy Management Systems in Distribution Networks Considering Transformer Aging

In the near future, home energy management systems (HEMSs) will become common in reaction to time-varying pricing, and residential electricity customers' striving to minimize their energy costs. However, if many residences connected to a common pole-top transformer are all optimizing their electricity consumption based on the same electricity tariff, their aggregated demand may result in large, short-lived peaks. Traditional demand peaks would be reduced since the electricity prices are high, but early morning (low price periods) demand peaks would be increased. Since high demand increases transformer temperatures and degrades their insulation, managing these peaks extends transformer life and reduces network upkeep costs. This paper presents an approach for managing the rollout of HEMSs on a distribution feeder. Several heuristic strategies for incentivizing customer adoption of HEMSs are investigated and compared to the optimal adoption strategy. A case study using representative data is conducted and the results show that transformer aging costs can be reduced by an order of magnitude by managing adoption rates and strategies. When incentivization costs are included, the optimal HEMS penetration and net benefit are reduced, but a value proposition still exists for targeted HEMS adoption.