Federated Aggregation of Demand Flexibility

Abstract: This paper proposes a federated framework for demand flexibility aggregation to support grid operations. Unlike existing geometric methods that rely on a static, pre-defined base set as the geometric template for aggregation, our framework establishes a true federated process by enabling the collaborative optimization of this base set without requiring the participants sharing sensitive data with the aggregator. Specifically, we first formulate the base set optimization problem as a bilevel program. Using optimal solution functions, we then reformulate the bilevel program into a single-level, unconstrained learning task. By exploiting the decomposable structure of the overall gradient, we further design a decentralized gradient-based algorithm to solve this learning task. The entire framework, encompassing base set optimization, aggregation, and disaggregation, operates by design without exchanging raw user data. Numerical results demonstrate that our proposed framework unlocks substantially more flexibility than the approaches with static base sets, thus providing a promising framework for efficient and privacy-enhanced approaches to coordinate demand flexibility at scale.