Stochastic local flexibility market design, bidding, and dispatch for distribution grid operations

Abstract

In order to unlock the flexibility potential of energy consumers and prosumers, the development of market mechanisms for flexibility planning and procurement is necessary. The authors propose a stochastic local flexibility market to solve grid issues such as voltage deviations and grid congestion in a distribution grid. Their proposed solution includes activation of flexibility assets at the consumers’ premises, using a stochastic local flexibility market design. They consider a pooled local flexibility market design under demand uncertainty and stochastic bidding process. Optimization models are used to determine flexibility demand and supply bids by the distribution system operator and the aggregator respectively. A stochastic AC-optimal power model to determine flexibility demand and a two-stage stochastic model to supply flexibility are implemented to simulate a stochastic local flexibility market. This allows to determine stochastic flexibility supply bid curves, and optimum flexibility supply dispatch. The analysis shows that the cost of grid operations is reduced when the system uses the local flexibility market. The proposed methodology is applicable for local flexibility market designs aiming to use potential end-user flexibility for grid operations.