Capacity Market for Distribution System Operator – with Reliability Transactions – Considering Critical Loads and Microgrids

Abstract

Conventional distribution system (DS) asset planning methods consider energy only from transmission systems (TS) and not from distributed energy resources (DER), leading to expensive plans. Newer transactive energy DS (TEDS) asset planning models, built on capacity market mechanisms, consider energy from both TS and DERs, leading to lower-cost plans and maximizing social welfare. However, in both methods the cost of higher reliability requirements for some users are socialized across all users, leading to lower social welfare. In this paper, a novel transactive energy capacity market (TECM) model is proposed for DS asset planning. It builds on TEDS incremental capacity auction models by provisioning for critical loads to bid and receive superior reliability as a service. The TECM model considers these reliability transactions, in addition, to selling energy transactions from TS and DERs, buying energy transactions from loads, and asset upgrade transactions from the network operator. The TECM model allows for islanded microgrids and network reconfiguration to maximize social welfare. The TECM model is assessed on several case studies, demonstrating that it achieves higher social welfare and a lower plan cost.