Exploiting the Potential of Energy Hubs in Power Systems Regulation Services

Smart grid infrastructures enable consumers with technologies, such as electric vehicles and energy storages, to participate in electric regulation services. Usually with such technologies, the implementation of large-scale regulation services confronts high interruption cost, uncertainties in availability, and batteries’ degradation cost. This motivates us to explore an alternative solution by participating energy hubs with energy conversion technologies to adjust the conversion of natural gas into electricity if the electric grid calls for demand shaping and regulation services. To exploit the potential of energy hubs, we propose an auction for their participation in regulation services. The energy hubs’ interaction in the auction is modeled as a non-cooperative game with coupling constraints. To study the existence and uniqueness of the generalized Nash equilibrium (GNE) we show that the underlying game admits a best response potential function, whose global minimum corresponds to the GNE. We also design a distributed algorithm to achieve that equilibrium. Simulations are performed to illustrate the convergence properties and scalability of the proposed algorithm. Results show that if a participant becomes an energy hub, its profit increases by 60% on average. The electric system operator also benefits from 31% payment reduction to the participants.