Researchers from the University of Southampton in the UK have created a method for forming virtual power plants that would effectively bring renewable energy from smaller generators into the grid. The formation of such “cooperative virtual power plants” (CVPPs) would use intelligent and multi-agent software systems and include a payment method — also designed by the researchers — to encourage distributed energy resources (DERs) to join CVPPs.
“There is considerable talk about how to integrate a large number of small, renewable sources into the grid in a more efficient and cost effective way, as current feed in tariffs, that simply reward production are expensive and ineffective,” said Dr Valentin Robu, from the University’s Agents, Interaction and Complexity Research Group, who worked on the study.
“CVPPs that together have a higher total production and, crucially, can average out prediction errors is a promising solution, which does not require expensive additional infrastructure, just intelligent incentives.”
By using a mathematical technique called proper scoring rules (a scoring rule, is a measure of the performance of an entity, be it person or machine, which repeatedly makes decisions under uncertainty), intelligent software agents, representing the individual DERs, are incentivised to report accurate estimates of their electricity production.
The researchers devised a scoring rules-based payment mechanism that incentivises the provision of accurate predictions from the CVPPs – and in turn, the member DERs – which aids in the planning of the supply schedule at the Grid. The mechanism guarantees that DERs are rewarded for providing estimates that are both accurate and have a high confidence, ensuring that software agents are given credit for high probability estimates that are close to the realised ones.
Valentin adds: “Scoring rules with specific incentive properties have long been used to design payment mechanisms that incentivise agents to report private probabilistic predictions truthfully and to the best of their forecasting abilities.
“We show that our mechanism incentivises real DERs to form CVPPs, and outperforms the current state of the art payment mechanism developed for this problem.”
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