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One of the main advantages of smart grids is the presence of advanced communication technologies that facilitate grid operators and local distribution companies (LDCs) to communicate directly with customers. While at one end, the end-user customers seek to optimize their energy consumption by deploying home energy management systems (HEMSs), the LDCs on the other hand, seek to improve the grid operational efficiency and reduce losses. In this paper, a two-stage optimization framework is developed wherein multiple HEMS simultaneously optimize their respective energy consumption patterns, and determines their flexibility provision, which is communicated to the LDC. The LDC aggregates the controllable demand profile and the flexibilities of each HEMS to optimize its operational performance and hence the peak reduction signals which are sent to the HEMS. Studies are carried out considering a 33-bus distribution system coordinating with 1295 houses connected at different buses, and with varying customer preferences and objectives to demonstrate the applicability of the proposed scheme.
Alrumayh et al. (2019) studied this question.