Decentralized Frameworks for Future Power SystemsTransactive control for residential demand-side management

Demand-side management (DSM) is a key element of the grid of the future, allowing consumers to participate in the system operation through automatic variations of demand that can be offered as flexibility services to improve efficiency and decrease grid costs. The majority of DSM methodologies developed over the last decades rely on centralized control of load devices, in which a single entity (system operator, retailer, or aggregator) is responsible to gather information about the consumption, perform a consolidated calculation of the control actions, and communicate set points to a large number of devices via central communication systems. This centralized form of control has the advantage of guaranteeing optimality of the solutions, but it raises important privacy concerns, especially in residential applications. Alternatively, traditional decentralized approaches rely on economic incentives and price signals with the objective of inducing optimal control actions taken independently by the consumers, without intrusive control orders. However, these price signals are defined a priori and they do not internalize the response of the consumers in the price formation, which may lead to suboptimal load scheduling solutions.