Modeling and Integration of Flexible Demand in Heat and Electricity Integrated Energy System

This paper is focused on utilizing customers' flexible energy demand, including both heat demand and electricity demand, to provide balancing resources and relieve the difficulties of integrating variable wind power with the combined heat and power. The integration of heat and electricity energy systems providing customers with multiple options for fulfilling their energy demand is described. Customer aggregators are introduced to supply downstream demand in the most economical way. Controlling customers' energy consumption behaviors enables aggregators to adjust their energy demand in response to supply conditions. Incorporating aggregators' flexible energy demand into the centralized energy dispatch model, a two-level optimization problem (TLOP) is first formed where the system operatormaximizes social welfare subject to aggregators' strategies, which minimize the energy purchase cost. Furthermore, the subproblems are linearized based on several reasonable assumptions. Optimal conditions of the subproblems are then transformed as energy demands to be described as explicit piecewise-linear functions of electricity prices corresponding to the demand bid curves. In this way, the TLOP is transformed to a standard optimization problem, which requires aggregators to only submit a demand bid to run the centralized energy dispatch program. All the parameters pertaining to the aggregators' energy consumption models are internalized in the bid curves. The proposed technique is illustrated in a modified testing system.