Value-added Electricity Services: Role of Microgrid Services In Distribution Network Planning

Abstract

In an electricity system without much renewable energy resources (RESs), there is correlation between wholesale electricity prices and demand in such a manner when electricity price rise, demand is high. But, high share of RESs can have a weakening impact on this correlation. Due to this effect, price-responsive entities like the non-utility microgrids (MGs) will react to a low wholesale market price while network load is high and simultaneously import power from the distribution system which causes to network congestion. In this context, this paper proposes a flexibility control framework of non-utility MGs for congestion management which is mapped on a bi-level model. The model states that the task of the DSO is to find the lowest Dynamic Tariff (DT) such that when the non-utility MGs aggregator minimizes his operation costs, the sum of inelastic demand and the non-utility MGs power exchange does not violate the network constraints. By using Karush–Kuhn–Tucker conditions the proposed bi-level model can be transformed to a single level optimization problem and be solved by commercial solvers.