Stacking Revenues From Flexible DERs in Multi-Scale Markets Using Tri-Level Optimization

Abstract

Rapid proliferation of flexible Distributed Energy Resources (DERs) as a result of Net Zero Emissions objectives entails a profound shift in the paradigm of local and national energy systems. Currently, DERs' simultaneous participation in multiple markets is generally restricted, which undermines their profitability. With the aim of increasing the number of business cases for them, a tri-level optimization problem that seeks the maximisation of revenues from DERs is proposed. The optimization problem considers simultaneous participation of different flexible DERs, such as, Electric Vehicles (EVs), Battery Energy Storage Systems (BESSs) and Heating, Ventilation and Air Conditioning (HVACs), in national and local markets. Markets are cleared sequentially, and the model is recast into a tractable single-level problem using its dual formulation and strong duality condition. Results from a case study based on the IEEE 14 bus transmission network, a realistic distribution network and SimBench dataset demonstrate the effectiveness of the proposed approach in increasing profits compared with a baseline scenario.