Incentive-compatible Flexibility Sharing for Enhancing Controllability and Economic Efficiency of Demand Response

To address the economic efficiency and controllability obstacles that significantly impact demand response (DR) performance, this paper proposes an incentive-compatible flexibility sharing strategy that optimally coordinates adjustment flexibility of customers with multi-period coupling constraints. In contrast to existing sharing schemes that set adjustment targets based on manipulable load baselines and share time-decoupled energy, we characterize the deviation between individual post-adjustment load curve and the load directrix (LD) as shared flexibility from a holistic multi-period perspective. LD represents an ideal target curve exogenously determined by the system to guide customer in DR, remaining immune to customer manipulation. A tractable model is established to encapsulate the decision making of optimal economic allocation of flexibility, and the closed-form optimal solution is rigorously derived. It is theoretically proved that flexibility sharing satisfies incentive compatibility. That is, individual decisions align with the guided optimal outcomes, which ensures the perfect tracking of LD. We show that every customer achieves cost reductions and hence has motivation to participate in the sharing. Furthermore, revenue adequacy and fairness are guaranteed. Case studies validate the theoretical outcomes and demonstrate the effectiveness and scalability of the flexibility sharing strategy.