Interdependency of Transmission and Distribution Pricing

Distribution markets are among the prospect being considered for the future of power systems. They would facilitate integration of distributed energy resources (DERs) and microgrids via a market mechanism and enable them to monetize services they can provide. This paper follows the ongoing work in implementing the distribution market operator (DMO) concept, and its clearing and settlement procedures, and focuses on investigating the pricing conducted by the DMO. The distribution locational marginal prices (D-LMPs) and their relationship with the transmission system locational marginal prices (T-LMPs) are subject of this paper. Numerical simulations on a test distribution system exhibit the benefits and drawbacks of the proposed DMO pricing processes.Comment: Accepted to 2016 IEEE PES Innovative Smart Grid Technologies (ISGT

Design and Operation of Distribution Markets

The growing penetration of distributed prosumers especially microgrids poses new challenges to the operation of wholesale markets and distribution power systems. Price spikes and higher uncertainty are among these consequences. Distribution markets are envisioned as a remedy to streamline integration of distributed resources and microgrids in the electricity market. This dissertation offers an analytical formulation of electricity markets in the distribution level, considering various prevailing aspects of the market operation problem. The prevailing challenges in regards to integration of microgrids in the electricity markets are illustrated first, and the distribution market operator (DMO) construct is outlined. The day-ahead scheduling of a microgrid participating in a DMO market is formulated and studied. Then the operation of distribution markets integrated with large numbers of responsive participants is considered, and its transactions with the distribution market participants on one hand, and the wholesale market on the other hand are modeled and studied. The market settlement and clearing, essential in operation of distribution markets, is considered and solved. The pricing mechanism in a distribution market is proposed and the relation of distribution and transmission and distribution prices is studied. A more advanced pricing mechanism considering voltages and reactive power is developed and studied. In order to offer a more accurate pricing structure within the distribution system, a linearized distribution power flow is utilized. The performance of the proposed methods is analyzed and the results are presented. Markets have been recently envisioned to be a suitable instrument for integration of distributed energy resources in the distribution system, but most of the discussions surrounding this topic is at the conceptual level. In this work, it is demonstrated that distribution markets are effective in integrating microgrids and distributed resources in the electricity markets, and an analytical model is presented for design and operation of such markets