An uncertainty-aware two-stage optimization framework for coordinating energy and reserve markets in TSO-DSO interface in the presence of energy storage systems

In the context of restructured electricity markets, the effective coordination between Transmission System Operators (TSO) and Distribution System Operators (DSO) is a significant challenge in energy management. This paper makes notable contributions by introducing a comprehensive framework that addresses this challenge through the coordination of energy and reserve market management. A key feature of our approach is the pivotal role played by prosumers within the distribution system, providing necessary flexibility for the TSO. The framework unfolds in two stages: distribution systems submit bids for energy and reserve markets, and the TSO optimizes transmission unit commitment based on these submissions to determine market-clearing prices. To handle uncertainties from load demand variations and intermittent Renewable Generators (RGs), a scenariobased stochastic method is employed. The model also incorporates Demand Response Programs (DRPs) and bilateral contracts for enhanced flexibility in both normal and emergency operating conditions. Validation using a 30-bus transmission network interconnected with four distribution systems, solved with the CPLEX solver in the GAMS environment, demonstrates significant advantages. Despite an increase in Locational Marginal Prices (LMP), the approach leads to a substantial 46.57 % reduction in Forced Load Shedding (FLS) during emergencies. Simultaneous utilization of DRPs and Energy Storage Systems (ESSs) not only reduces operational costs by 12.91 % in normal conditions but also enhances the resilience index (RI) by 17.45 % during emergencies. This research offers a practical framework with tangible benefits in market-clearing and emergency scenarios, contributing significantly to addressing the complexities between TSOs and DSOs in restructured electricity markets.