IEEE Systems, Man and Cybernetics Magazine - July 2021 - 12

solution to match supply and demand based on price signals
[12]. Additionally, their designs assume that an individual
management strategy of DERs cannot affect the
market price (i.e., individuals are price takers), which is an
unsound assumption if the number of elements following
such a management algorithm is large (e.g., 50% of households).
For example, because of the current structure of
European markets composed of day-ahead and balancing
markets, the use of the so-called real-time price to make
operational decisions, such as storing energy or postponing
the operation of a flexible load, can be problematic
because of the collective effects of individual optimizing
decisions [13], [14]. Other approaches, such as peer-to-peer
exchanges [11], [15], [16], have also appeared as potential
promising candidates for future governance models; here,
prosumers locally trade their production in local markets,
also employing the most recent ICTs as distributed ledgers
(blockchains) [17].
Given this background, this article sheds light on and
proposes a way to accomplish an alternative vision that
assumes a commons-based governance model [18], [19]
to build an energy Internet based on PEM [20], [21]. This
vision also brings the advantages of decentralized optimization
[22], [23] but with a commons-based governance
framework. Next, we describe an SDEN as a
method to create a commons-based cyberphysical system,
where electricity is shared among all of the virtual
microgrid members.
Physical
PEM and the SDEN
Power grids have been traditionally managed to ensure that
electrical supply follows electrical demand. However, the
steady growth of distributed production units, which are highly
dependent on intermittent weather conditions, has driven the
development of new techniques that control flexible loads to
make the demand follow the availability of the supply. These
actions are known as DSM [24]-[26]. DSM is a broad term that
is associated with different time scales [20], [24], from primary
control at the sublevel to load/storage scheduling plans with
time horizons of hours, days, and even months (if long-term
storage is considered). Furthermore, DSM is also related to different
types of consumers, offering possibilities for largescale
industries, commercial buildings, and households.
In this study, we focus on DSM for residential loads considering
operational decisions in the tertiary-control regime
(e.g., a 10-min time scale with a limited time horizon of 24 h).
Hence, our solution is similar to the role played by retailers
today in European electricity markets as well as some energy
service providers and aggregators. The proposed SDEN
denotes a cyberphysical system employed to manage the
(physical) energy delivery as a virtualized energy-inventory
problem based on energy packets, determined in the cyberdomain.
Figure 1 illustrates the proposed solution. It is worth
noting that this architecture presumes a reliable, secure, and
scalable Internet of Things (IoT) network as the key enabler.
This is reasonable and feasible, given the recent rapid developments
in IoT technology. In addition to the existing wired
Cyber
Source
Cache Buffer
Server
Cloud
Router
Client A Client B Client C
Figure 1. An illustration of the proposed concept. The electricity network is conceptualized as a cyberphysical
system based on physical elements that are characterized as software-defined agents in the cloud
(cyberdomain).
12 IEEE SYSTEMS, MAN, & CYBERNETICS MAGAZINE July 2021

IEEE Systems, Man and Cybernetics Magazine - July 2021

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