Wholesale Market Participation of DERA: DSO-DERA-ISO Coordination

TL;DR

This paper introduces a forward auction mechanism enabling distributed energy resource aggregators to access wholesale markets while maintaining distribution network security without real-time DSO intervention.

Contribution

It proposes a novel auction-based approach for allocating distribution network limits to DERAs, ensuring secure operation and market participation.

Findings

The auction guarantees distribution network security within allocated limits.

Empirical studies show favorable surpluses for DSOs and DERAs.

The mechanism effectively balances operational costs and market participation.

Abstract

Distributed energy resource aggregators (DERAs) must share the distribution network together with the distribution utility in order to participate in the wholesale electricity markets that are operated by independent system operators (ISOs). We propose a forward auction that a distribution system operator (DSO) can utilize to allocate distribution network access limits to DERAs. As long as the DERAs operate within their acquired limits, these limits define operating envelopes that guarantee distribution network security, thus defining a mechanism that requires no real-time intervention from the DSOs for DERAs to participate in the wholesale markets. Our auctions take the form of robust and risk-sensitive markets with bids/offers from DERAs and utility's operational costs. Properties of the proposed auction, e.g., resulting surpluses of DSO and the DERAs, and the auction prices, along with empirical performance studies, are presented.