Distribution Locational Marginal Price in the Distribution Level Electricity Market

The proliferation of DERs in the distribution system is driving the transition from a passive distribution system to an active and flexible one. In this context, both industrial and academic fields have proposed to extend the transmission level market to the distribution level, and various local electricity market concepts appear. At the same time, the pricing mechanism is critical for the distribution-level electricity market. Therefore, many studies have extended the locational marginal price (LMP) to the distribution locational marginal price (DLMP) to capture the characteristics of the distribution system. This dissertation presents an in-depth study of the DLMP in the distribution-level market.

First, the DLMP is proposed to guide the daily consumption of residential loads, such as HVACs and EVs. A tri-level distribution market framework is established to model the relationship between the distribution system operator (DSO), load aggregators (LAs) and individual residents. Incentivized by the DLMP, residents are likely to adjust their consumption behaviors to save electricity bills and satisfy their comfortable requirements.

Second, uncertainties from all three levels and multiple sources are integrated into the above work. Interval optimization and stochastic optimization are utilized to model different uncertainties. Utilizing the latest released operating information, a rolling horizon optimization (RHO) scheme is employed to continuously obtain the consumption schedule and mitigate the day-ahead schedule's radicalness and conservativeness.

Third, the DLMP is utilized as price signals for future unit investment. Battery energy storage systems (BESSs) are selected as the research target. Then a profit-oriented BESSs siting and sizing problem is formulated to maximize investors’ arbitrage revenue under a limited investment budget.

Finally, a peer-to-peer (P2P) market is studied. A hybrid two-layer distribution electricity market framework is established with a pool-based distribution market at the upper level and a decentralized P2P market at the lower level. Physical constraints are considered in the pool-based market, and the privacy of the grid and peers is preserved because only DLMP and energy quantity are exchanged between the two layers.