An Incentive Mechanism for Energy Communities to Foster Resilience Investment Initiatives

In recent years, the increasing frequency of extreme weather events has significantly jeopardized the security of power systems. Incentivizing demand-side stakeholders, such as energy communities, to install behind-the-meter backup energy units within their regions is an effective strategy for enhancing system resilience. Nonetheless, there is currently no comprehensive mechanism in place to promote demand-side participation in grid services, particularly in resilience services. To fill this gap, this paper proposes a collaborative strategy for the distribution system operator and demand-side stakeholders to invest in enhancing the backup energy capacity of the system. Two major contributions of this work are summarized as: 1) We present a cost-effective backup generation integration plan for the distribution system to protect against the high impact, low-frequency events within specified budget constraints. 2) We introduce a cost recovery strategy based on the Shapley value with the investment participation order considered to prevent the free-riding effect among these energy communities. A thorough analysis of the problem is conducted through cooperative game theory, leading to effective solutions. The effectiveness of the proposed mechanism is validated using the modified IEEE 33-node systems.