Enabling Grid-Aware Market Participation of Aggregate Flexible Resources

TL;DR

This paper develops optimization methods to accurately derive generation cost curves for distribution systems with high DER penetration, enabling active distribution systems to participate in energy markets under new regulations.

Contribution

It introduces robust optimization formulations and solution algorithms for deriving linear and quadratic cost curves considering network and DER constraints, facilitating market participation.

Findings

Validated on a realistic test feeder with high DER penetration

Efficient algorithms enable practical cost curve derivation

Supports active distribution system market participation

Abstract

Increasing integration of distributed energy resources (DERs) within distribution feeders provides unprecedented flexibility at the distribution-transmission interconnection. With the new FERC 2222 order, DER aggregations are allowed to participate in energy market. To enable market participation, these virtual power plants need to provide their generation cost curves. This paper proposes efficient optimization formulations and solution approaches for the characterization of hourly as well as multi-time-step generation cost curves for a distribution system with high penetration of DERs. Network and DER constraints are taken into account when deriving these cost curves, and they enable active distribution systems to bid into the electricity market. The problems of deriving linear and quadratic cost curves are formulated as robust optimization problems and tractable reformulation/solution algorithm are developed to facilitate efficient calculations. The proposed formulations and solution algorithm are validated on a realistic test feeder with high penetration of flexible resources.