Modeling strategic behavior of distribution company in wholesale energy and reserve markets

摘要

The decision making framework in power system has changed due to presence of distributed energy resources (DERs). These resources are installed in distribution networks to meet demand locally. Therefore, distribution companies (Discos) are enabled to supply energy through these resources to meet their demand at a minimum operation cost. Moreover, in this framework, the Disco will change its role in the wholesale energy market from price taker to price maker as a decision maker. Moreover, DERs can serve reserve in their normal operation. This opportunity facilitates Disco to provide reserve to the wholesale reserve market. The strategic behavior of a Disco in wholesale energy and reserve markets is modeled in this paper as a bi-level optimization problem. The operation problem of the Disco and the Independent System Operator (ISO) are modeled in the upper- and lower-level problems, respectively. Karush-Kuhn-Tucker (KKT) dualilty theory conditions are employed to transform the proposed nonlinear bi-level problem to a linear single level one. Numerical studies demonstrate the proficiency of the proposed model and the solution methodology.