Grid Impact Aware TSO-DSO Market Models for Flexibility Procurement: Coordination, Pricing Efficiency, and Information Sharing
Abstract
This paper proposes five market models for the procurement
of flexibility by transmission (TSO) and distribution
system operators (DSOs), based on several TSO-DSO coordination
schemes, including a disjoint distribution, disjoint transmission,
common, fragmented, and multi-level market. The properties of
these models are then analyzed. In particular, the common market
is first proven to be more efficient than the other market
models. Then, different methods are proposed to adequately price
TSO/DSO interface flows, when procuring cross-grid flexibility. It
is then shown that, when interface flows are optimally priced, the
fragmented and multi-level market solutions converge to those of
the common market, reaching optimal efficiency. To prevent the
need for any network information sharing among system operators
in the different coordination schemes, decomposition methods
based on bi-level programming and the alternating direction
method of multipliers (ADMM) are proposed. A developed case
study, considering an interconnected transmission-distribution system,
corroborates the mathematical findings by highlighting the
greater efficiency of the common market, the effect of adequate
interface pricing on reducing procurement costs, and the capability
of the decomposition methods to reach optimal market solutions
with limited information exchange.
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