Distribution Locational Marginal Pricing Under Uncertainty Considering Coordination of Distribution and Wholesale Markets (2110.07391v1)

Abstract: An effective distribution electricity market (DEM) is required to manage the rapidly growing small-scale distributed energy resources (DERs) in distribution systems (DSs). This paper proposes a day-ahead DEM clearing and pricing mechanism to account for the uncertainty of DERs and the coordination with the wholesale electricity market (WEM) through a bi-level model. The upper-level model clears the WEM in the transmission system (TS) and forms the locational marginal price (LMP) and uncertainty LMP (ULMP) for energy and uncertainty/reserve, respectively. In the lower level, a robust scheduling model considering WEM-DEM coordination and uncertainties is proposed to clear the DEM. Accordingly, the distribution LMPs (DLMPs) for active power, reactive power and uncertainty/reserve are derived to reward the energy/reserve provision and charge uncertain resources in the DEM, which provide effective price signals for managing not only the voltage and congestion, but also the uncertainty in DSs. A heterogeneous decomposition (HGD) algorithm is utilized to solve the bi-level model in a decentralized manner with limited information interaction between TS and DSs, which guarantees the solution efficiency and information privacy. The effectiveness of the proposed method is verified via numerous case studies.