Hierarchical and Decentralized Stochastic Energy Management for Smart Distribution Systems With High BESS Penetration

In this paper, we propose a hierarchical and decentralized stochastic energy management scheme for smart distribution systems with high battery energy storage system (BESS) penetration. An energy management problem is formulated based on a two-layer hierarchical architecture for the joint optimization of distribution system operator (DSO) and customers. In the lower layer, the stochastic energy management problem of individual BESS is formulated as a Markov decision process to minimize the electricity cost. In the upper layer, the solutions of individual BESS stochastic energy management problems are used for the energy management of smart distribution systems to minimize the line losses while maintaining the voltage levels within required range. Considering the partial communications among households, this problem can be transformed into a decentralized partially observable Markov decision process with stochastic controllers. Accordingly, an energy management scheme based on exhaustive backups is proposed to solve the formulated problem in a decentralized manner. To reduce the computational complexity caused by high BESS penetration, a heuristic search and pruning method is further proposed. The case study results based on IEEE 5-bus test feeder and IEEE European low voltage test feeder indicate that the proposed scheme can reduce the electricity costs of both DSO and customers, while having the voltage levels regulated. Also, the computational complexity is much lower for a smart distribution system with high BESS penetration, in comparison with existing BESS energy management schemes.