On the development of organized nodal local energy markets and a framework for the TSO-DSO coordination

In this paper we propose a market design for implementing organized nodal electricity markets for the distribution grid. Distribution System Operators (DSOs) are expected to manage a massive penetration of Distributed Energy Resources (DERs), such as Renewable Energy Resources (RES), Electric Vehicles (EVs), Storage and Demand response. A Day Ahead Market (DAM) and a Real-Time Market (RTM) is proposed to optimize and clear offers and bids submitted by the DERs. A Mixed Integer Programming (MIP) Security Constrained Unit Commitment (SCUC) and a Security Constrained Economic Dispatch (SCED) iterates with a detailed asymmetric and unbalanced three-phased Distribution Power Flow (DPF) to enforce all constraints in the distribution grid. The solution produces Distribution Locational Marginal Prices (DLMPs) for all phases at every node of the distribution grid. A general framework for the coordination of the DSO with the ISO/TSO markets is also presented as an integral part of the proposed multi-level energy market design. The proposed new methodology has been applied to an actual large-scale distribution system. Numerous simulation scenarios have been executed to prove the validity of the proposed approach. In this paper a simple small subset of the actual distribution system is selected to illustrate the proposed methodology.