Social Equity Based Optimal Power Flow Framework to Hedge Against Price Events

TL;DR

This paper introduces a social equity driven optimal power flow framework designed to mitigate price spikes in electricity markets by balancing supply costs with consumer socioeconomic considerations, tested on standard power system models.

Contribution

It presents a novel framework that integrates social welfare and socioeconomic scores into optimal power flow to enhance fairness during price events, a significant advancement over traditional methods.

Findings

Framework converges on tested power systems.

Socioeconomic score influences social welfare outcomes.

Potential to improve fairness in electricity pricing.

Abstract

With the increasing frequency of high impact low probability events, electricity markets are experiencing significant price spikes more often. This paper proposes a novel social equity driven optimal power flow framework to mitigate the adverse effects of price events that lead to such price spikes. The framework integrates social welfare optimization with socioeconomic considerations by including a socioeconomic score that quantifies the energy burden and socioeconomic status of consumers. By incorporating both supply cost and consumer satisfaction, the model aims to achieve a balanced and fair distribution of resources during price events, while considering resource scarcity and possible load curtailment. The proposed framework is tested for convergence on modified versions of the PJM 5-bus system and IEEE 24-bus reliability test system, discussing its potential effectiveness in enhancing social equity and optimizing power flow under system security constraints. Sensitivity analysis further highlights the impact of socioeconomic score on social welfare, providing insights for future improvements.