A Hierarchical Local Electricity Market for a DER-rich Grid Edge

Abstract

With increasing penetration of DERs in the distribution system, it is critical to design market structures that enable smooth integration of DERs. A hierarchical local electricity market (LEM) structure is proposed in this paper with a secondary market (SM) at the lower level representing secondary feeders and a primary market (PM) at the upper level, representing primary feeders, in order to effectively use DERs to increase grid efficiency and resilience. The lower level SM enforces budget, power balance and flexibility constraints and accounts for costs related to consumers, such as their disutility, flexibility limits, and commitment reliability, while the upper level PM enforces power physics constraints such as power balance and capacity limits, and also minimizes line losses. The hierarchical LEM is extensively evaluated using a modified IEEE-123 bus with high DER penetration, with each primary feeder consisting of at least three secondary feeders. Data from a GridLAB-D model is used to emulate realistic power injections and load profiles over the course of 24 hours. The performance of the LEM is illustrated by delineating the family of power-injection profiles across the primary and secondary feeders as well as corresponding local electricity tariffs that vary across the distribution grid. Together, it represents an overall framework for a Distribution System Operator (DSO) who can provide the oversight for the entire LEM.

Figures (7)

• Figure 1: Overall schematic illustrating how the proposed LEM integrates seamlessly into the existing radial distribution network, and connects with bulk transmission.
• Figure 2: Proposed hierarchical LEM structure and optimization framework incorporating bid flexibility. The upper level PMO coordinates with the WEM, while the SMO at the lower level oversees the DCAs. At the bottom of this figure, we show an example of a feasible flexibility bid from a DCA and the revised flexibility range that results from the SM clearing.
• Figure 3: An illustrative timeline of the proposed LEM, also showing the interactions and interplay between the primary and secondary level markets.
• Figure 4: SM bidding and clearing for primary feeder node 7, with 3 DCAs $j\in \{1,2,3\}$. The solid lines in \ref{['fig:sec_bids']} and \ref{['fig:sec_solns']} represent the baseline injection bids and market cleared setpoints, respectively, while the shaded regions around them are the flexibility ranges. Local retail tariffs from the SM $\mu^{7P^*}_j$ are shown in \ref{['fig:sec_prices']}. The SMO aggregates these PM schedules to bid into the PMO as in \ref{['fig:smo_pmo_bids']}. The dashed lines in \ref{['fig:sec_solns']} indicate the actual responses of the DCAs in response to their market cleared schedules.
• Figure 5: Selected solutions from the PM clearing.