Automatic Power Exchange for Distributed Energy Resource Networks: Flexibility Scheduling and Pricing

This paper proposes an Automatic Power Exchange (APEX) that enables monetization of underutilized distribution system energy resources. APEX features an open-gate forward market design to incorporate uncertainty from variable resources, and an explicit flexibility market that schedules flexible resources based on information submitted by users through a simple yet expressive order format. We study the non-convex non-preemptive scheduling problem in APEX, proposing polynomial time algorithms with finite and asymptotic performance guarantees. We then analyze the properties of marginal pricing, generalized to fit the APEX context with forward markets and distribution network constraints. We establish that it is revenue adequate but may lead to inadmissible prices for flexible orders. We then suggest a simple pricing mechanism that provably produces admissible prices for users and adequate revenue for APEX if implemented together with the proposed scheduling algorithms.