ISO and DSO Coordination: A Parametric Programming Approach

Abstract: In this paper, a framework is proposed to coordinate the operation of the independent system operator (ISO) and distribution system operator (DSO) to leverage the wholesale market participation of distributed energy resources (DERs) aggregators while ensuring secure operation of distribution grids. The proposed coordination framework is based on parametric programming. The DSO builds the bid-in cost function based on the distribution system market considering its market player constraints and distribution system physical constraints including the power balance equations and voltage limitation constraints. The DSO submits the resulting bid-in cost function to the wholesale market operated by the ISO. After the clearance of the wholesale market, the DSO determines the share of its retail market participants (i.e., DER aggregators). Case studies are performed to verify the effectiveness of the proposed method.