The proliferation of distributed energy assets necessitates the provision of flexibility to efficiently operate modern distribution systems. In this article, we propose a flexibility market through which the DSO may acquire flexibility services from asset aggregators in order to maintain network voltages and currents within safe limits. A max-min fair formulation is proposed for the allocation of flexibility. Since the DSO is not aware of each aggregator's local flexibility costs, we show that strategic misreporting can lead to severe loss of efficiency. Using mechanism design theory, we provide a mechanism that makes it a payoff-maximizing strategy for each aggregator to make truthful bids to the flexibility market. While typical truthful mechanisms only work when the objective is the maximization of Social Welfare, the proposed mechanism lets the DSO achieve incentive compatibility and optimality for the max-min fairness objective.

In modern smart grids, the focus is increasingly shifted towards distributed energy resources and flexible electricity assets owned by prosumers. A system with high penetration of flexible prosumers, has a very large number of variables and constraints, while a lot of the information is local and non-observable. Decomposition methods and local problem solving is considered a promising approach for such settings, particularly when the implementation of a decomposition method features a market-based analogy, i.e. it can be implemented in a Transactive Energy fashion. In this paper we present an auction-theoretic scheme for a setting with non-convex prosumer models and resource constraints. The scheme is evaluated on a particular case study and its scalability and efficiency properties are tested and compared to an optimal benchmark solution. A game-theoretic analysis is made with respect to how an intelligent agent, that bids on behalf of a prosumer can try to strategize within the auction, in order to make itself better-off. Our simulations show that there is an alignment of incentives, i.e., when the prosumers try to strategize, they actually improve the auction's efficiency.

This paper contributes to the well-known challenge of active user participation in demand side management (DSM). In DSM, there is a need for modern pricing mechanisms that will be able to effectively...

High penetration of Renewable Energy Sources in modern smart grids necessitates the development of Demand Response (DR) mechanisms as well as corresponding innovative services for the emerging flexibility markets. From a game-theoretic perspective, the key requirements for a DR mechanism are: efficiency in terms of social welfare, practical applicability, scalability, privacy and incentive compatibility, in the sense of making it a dominant strategy for each user to act truthfully according to his/her real preferences, leaving no room for cheating. Previous works typically address only a subgroup of these requirements. In this paper, we propose a DR architecture, including a mechanism based on Ausubelb's clinching auction and a communication protocol, that provably guarantee both efficiency and truthful user participation. Practicality/easiness of participation is enhanced via simple queries, while scalability and user privacy are preserved via a distributed implementation. Simulation results confirm the desired properties, while also showing that the truthfulness property becomes even more important in markets where participants are not particularly flexible.