Extending market activities for a distribution company in hourly-ahead energy and reserve markets – Part I: Problem formulation

This work presents a novel hourly-ahead profit model for an active distribution company ( DISCO), a DISCO with high capacity level of connected DGs that can make selling proposals for the markets, in a pool-based system. The presented model engages DSICO in both energy producing and reserve providing activities. DISCO’s earnings from reserve market include the remuneration both for real-time generation and ready-for-service capacity. To achieve the optimal decisions for an active DISCO in the energy and reserve markets, a two-stage optimization model and associated mathematical formulations have been developed. The first subproblem extracts a single operating profile (a lumped financial model) of the whole distribution system, including DGs and ILs, at the connecting point to the upstream network. The second one determines the optimal values of decision variables (power and reserve commodities) to maximize the DISCO’s profit, in case such variables are accepted in the markets. In other words, it aims to optimally allocate the DISCO’s generating capability for proposing into the energy and reserve markets, from the DISCO’s perspective. It also proposes a profit-based network reconfiguration methodology for a multi-substation multi-feeder DISCO to increase DISCO’s ability to gain more benefits from the market activities. It conducts DISCO’s generating capabilities towards the proper substations to reap more probable benefits. It also introduces fast, simple, and straightforward algorithms for recognition and removal of configurations having loop and/or islanding parts in. Simulation results are given at the second part of the present work.