2 - Distribution locational marginal pricing for congestion management in distribution networks

Abstract

Chapter 2 proposes a distribution locational marginal pricing (DLMP) method based on quadratic programming (QP) to alleviate day-ahead congestion in distribution networks with high penetration of flexible demands. In the DLMP method, the distribution system operator (DSO) calculates dynamic tariffs (DTs) and publishes them to the aggregators, who make the optimal energy plans for the flexible demands. First, a QP-based DSO optimization model considering network constraints is formulated to calculate DTs. Then, based on DTs, the aggregator optimization model is formulated to determine aggregator energy plans. It is proven that, through the link of DTs, the DSO energy plan and the aggregator energy plan are equivalent. Thus, the aggregator energy plans respect network constraints, denoting that congestion is effectively resolved. Case studies on a distribution network with high penetration of electric vehicles and heat pumps validate the equivalence of solutions obtained with the DSO and aggregator optimization models and the effectiveness of the proposed QP-based DLMP for congestion management.