Toward a Retail Market for Distribution Grids

Modern active distribution grids are characterized by the increasing penetration of distributed energy resources (DERs). Proper coordination and scheduling of these DERs requires a local retail market which can operate at the distribution grid level. In this paper, we propose a retail market for optimally managing and scheduling DERs, and coordinating ancillary services in a distribution grid. Our proposed retail market leverages a recently proposed distributed proximal atomic coordination (PAC) algorithm which has several advantages over other distributed algorithms, with reduced local computational effort and enhanced privacy. We describe how the market can be implemented using a Distribution System Operator (DSO), whose representatives are located at the primary feeder level and workers are located at the substation level, and how the DSO will interact with the Wholesale Electricity Market. Finally, we extensively validate the performance of the proposed retail market via simulations of three networks: a real distribution grid in Tokyo, a balanced IEEE 123-bus distribution grid, and a modified IEEE 13-bus network. Our results show that the proposed market is practical and can be easily implemented in distribution grids, resulting in optimal real-time scheduling of DERs and compensation in the form of distributed locational marginal prices.