Enhancing Power Distribution System Resilience through Insurance Mechanisms: An Insurer Optimization Approach with V2G Aggregator Participation

Current approaches to enhancing system resilience, which prioritize the asset allocation and emergency scheduling optimization, may face challenges related to inadequate asset availability and insufficient, inequitable response capabilities. To address these challenges, this paper designs an insurance mechanism to enhance the resilience of power distribution systems against extreme events. The strategic behavior of the insurer regarding insurance provision and asset aggregation is modeled under a risk-based decision-making framework to maximize the effectiveness of the insurer mechanism. A cooperative framework is formulated to incentivize the emergency service provision from the V2G-ca-pable vehicle aggregator (V2GA). The optimal insurance provisions are determined by addressing the user-insurer-V2GA negotiation process through a tailored two-level nested alternating direction method of multipliers (ADMM) algorithm. Specifically, the outer ADMM coordinates user–insurer contract negotiation, the inner ADMM handles insurer-V2GA coordination, and the Nash bargaining theory is employed for profit allocation between the insurer and the V2GA. Numerical results verify that the proposed insurer optimization approach could offer a promising solution to enhance system resilience against extreme events.