Essays on Economics of Distributed Energy

Abstract

Essays on Economics of Distributed Energy

Evgeniya Tsybina 165 pages

Directed by Dr Matthew Oliver

We propose and implement a series of theoretical and applied essays to analyze the economic behavior of owners of distributed energy resources. Specifically, we propose a model of a distributed energy prosumer, an economic agent of dual nature that buys and sells electricity simultaneously. We implement our model within the Cournot framework and test its performance through simulations related to different cost conditions, demand conditions, and transmission constraints. We find that prosumers can exercise market power but would supply more and keep prices lower than in a conventional producer model. Then we suggest an approach that enables residential consumers to offer their devices for demand response in a privacy preserving way. We propose an adaptation of the two dimensional bin packing algorithm based on Minkowski sum so that the algorithm accounts for the nature of electrical appliances. We then test our algorithm using a series of simulations and compare its results to the basic demand response in which a utility can access each device separately. We find that about 32% of capacity is not offered for demand response in the privacy preserving scenario, which indicate the hidden cost of privacy in the form of lost capacity. Finally, we propose a zip code area level study to establish the correlations between the installation of residential rooftop photovoltaics and existing generation and non-generation incentives. These include demand response options, community solar, net metering, and electricity rates. We find that community solar is negatively correlated with rooftop installations, while net metering and demand response are positively correlated with rooftop installations. We also find evidence of significant geospatial correlations in the data.