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An optimal real-time pricing strategy for aggregating distributed generation and battery storage systems in energy communities: A stochastic bilevel optimization approach


International Journal of Electrical Power and Energy Systems


Management Science and Operations

Authors / Editors

Sarfarazi S;Mohammadi S;Khastieva D;Hesamzadeh R M;Bertsch V;Bunn D


Publication Year



The expansion of distributed electricity generation and increasing capacity of installed battery storage systems on the community level has posed challenges to efficient technical and economic operation of the power system. With advances in smart-grid infrastructure many innovative demand response business models aim to tackle these challenges, while creating financial benefits for the participating actors. In this context, we propose an optimal real-time pricing (ORTP) approach for the aggregation of distributed energy resources within energy communities. We formulate the interaction between a profit-maximizing community-owned aggregator and the users (prosumagers and electric vehicles) as a stochastic bilevel disjunctive program. To solve the problem efficiently, we offer a novel solution algorithm, which applies a linear quasi-relaxation approach and an innovative dynamic partitioning technique. We introduce benchmark tariffs and solution algorithms and assess the performance the proposed pricing strategy and solution algorithm in four case studies: Our results show that the ORTP strategy increases community welfare compared to benchmark electricity, while providing useful grid services. Furthermore, our findings reveal superior computational efficiency of our proposed solution algorithm in comparison to benchmark algorithms.


Battery storage system; Bilevel optimization; Branch and bound; Demand 12 response; Electric vehicle; Energy community; Distributed generation; Prosumager; 13 real-time pricing

Available on ECCH


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