Network-Secure and Price-Elastic Aggregator Bidding in Energy and Reserve Markets

The increasing uptake of distributed energy resources (DER) is displacing the dispatchable generators responsible for providing frequency response in our power system. To compensate for the withdrawal of such generators, the market participation of DER fleets through aggregators has been suggested in the literature. Unfortunately, these works are either limited to price-taking aggregators or neglect the distribution network. The first limitation leads to inelastic bids which do not reflect DER flexibility, while the second results in bids that do not lie within the network boundaries. To mitigate these challenges, we propose a price-elastic aggregator bidding approach together with a network conforming layer. Our approach enables aggregators to offer a range of network-secure bid bands for different prices. To preserve the independent role of each stakeholder and share the computational burden, we decompose the problem into aggregator and network subproblems, solved sequentially. Moreover, we confer aggregators the possibility to provide reactive power support to enable the network to accept greater throughput. Finally, since our approach ensures network feasibility prior to bids reaching the market, it minimizes the disruption to existing wholesale market structures. Our results on a 141-bus network shows 19% higher benefits for aggregators, compared to the inelastic bidding approach.