A residential electric grid (microgrid) is proposed as a distribution arrangement between a utility company and a group of individual residential consumers. The residential consumers are also viewed as “producers” of renewable energy and are defined as “prosumers”. An aggregator is used at the microgrid to negotiate with the utility on behalf of the group of prosumers, commanding a better price for excess electricity sold back to the utility (especially as part of a Demand Response (DR) program). Importantly, the microgrid is constructed to include energy storage capability at the microgrid. Therefore, the arrangement is capable of supplying power to the residential customers in the event of an outage at the macrogrid level, and also selling back the electricity to the utility as part of a DR program.
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