A trilevel programming model for the coordination of wholesale and local distribution markets considering GENCOs and proactive customers

Abstract

Implementing local distribution markets has been pointed out to simultaneously deal with proactive customer bids and coordinate their power dispatch. However, the impacts of such coordination in the transmission system are usually disregarded. Additionally, proposals that aim to coordinate the operation of distribution and transmission systems usually regard the distribution system operator as a strategic price-maker in the wholesale market, while other wholesale market agents with similar market power are not. In this paper, we propose a trilevel programming framework in which the wholesale market is modeled in the upper level, the wholesale market agents, namely generation and distribution companies, are characterized in the middle level, and the distribution-connected proactive customers are considered in the lower level. The resulting formulation allows the incorporation of multiple agents in any of the markets without the need to change the solving technique. Furthermore, the energy market clearing processes regard every agent participating in the same market at the same hierarchy. A formulation to enforce uniform energy prices is proposed to overcome the inaccessibility to marginal prices under the proposed framework. Numerical results are presented for a power system composed of distribution and transmission networks with multiple independent agents to validate the proposed approach.