Decentralized Coordination of Controlled Loads and Transformers in a hierarchical structure

The paper considers the coordination of controlled loads in a setting where the loads are connected to the distribution network through transformers. Our objective is to design a decentralized control method that can motivate selfish loads to achieve global benefits. This problem has a hierarchical structure. At the lower level, each transformer broadcasts a price signal to the loads connect to it, under which loads establish their best usage strategies. At the upper level, transformers communicate with the distribution network and obtain a price reflecting the system generation cost. The price broadcast by each transformer includes this system price together with another component that reflects individual loading characteristics. By proposing a dynamic update algorithm, it is shown that the system converges to the unique and efficient solution with fast convergence rate.