A DSO-based day-ahead market mechanism for optimal operational planning of active distribution network

Grid-edge distributed energy resources (DERs) present both operational challenges and opportunities to distribution system operators (DSO). This paper presents a day-ahead scheduling strategy for DER-rich active distribution networks to leverage operational flexibilities of various DERs for effective network management. The scheduling strategy is realized based on a DSO-centric day-ahead market model that incorporates a multi-period and two-stage optimal power flow (OPF) model to determine scheduling and pricing for network and non-network DERs. The uncertainties in day-ahead operation stemming from local generation, load consumption, and market prices are robustly considered for hedging the intermittency and forecasting uncertainties. A novel bid price function is proposed for local distributed solar PV generation aiming at maximizing participation in network service. A new reactive power management and pricing scheme is also presented for optimal scheduling of voltage support devices within distribution network. The proposed framework is implemented on IEEE-33 bus balanced test system and operational planning strategy is analyzed for overall cost-benefits of the system at various uncertainty levels. A 7-10 percent saving in cost of procurement for DSO can be accrued at various uncertainty levels, and a 10 percent increase in revenue for the PV generation can be observed.