# Flexible Demand Resource Pricing Scheme: A Stochastic Benefit-Sharing Approach

## TL;DR

This paper proposes a stochastic benefit-sharing pricing scheme for flexible demand resources in microgrids, enhancing economic efficiency and risk mitigation through an iteration-based chance-constrained method.

## Contribution

It introduces a novel benefit-sharing approach that evaluates demand resource value based on microgrid performance, unlike traditional utility-based methods.

## Key findings

- Effective in improving microgrid operation performance
- Reduces financial risks for microgrid operators
- Demonstrated success in experimental microgrid tests

## Abstract

With the rapidly increased penetration of renewable generations, incentive-based demand side management (DSM) shows great value on alleviating the uncertainty and providing flexibility for microgrid. However, how to price those demand resources becomes one of the most significant challenges for promoting incentive-based DSM under microgrid environments. In this paper, a flexible demand resource pricing scheme is proposed. Instead of using the utility function of end users like most existing literatures, the economic benefit of flexible demand resources is evaluated by the operation performance enhancement of microgrid and correspondingly the resource is priced based on a benefit sharing approach. An iteration-based chance-constrained method is established to calculate the economic benefit and shared compensation for demand resource providers. Meanwhile, the financial risks for the microgrid operator due to uncertain factors are mitigated by the chance-constrained criterion. The proposed scheme is examined by an experimental microgrid to illustrate its effectiveness.

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Source: https://tomesphere.com/paper/1906.04127