Modeling Framework Simulating the TERRE Activation Optimization Function

The Trans-European Replacement Reserve Exchange (TERRE) project is the European implementation project for exchanging Balancing Energy (BE) from Replacement Reserves (RR). Its main objective is to operate a common European platform that gathers all RR Balancing Energy Orders (BEOs) from Transmission System Operators' (TSOs) local BE markets into a Common Merit Order List (CMOL). It provides an optimized allocation of RR, covering all TSOs' RR BE needs, by executing the Activation Optimization Function (AOF). In this paper, the mathematical formulation of the AOF is presented, which explicitly incorporates all standard products and constraints that are provisioned in the approved implementation framework. The clearing problem is formulated as a Mixed Integer Linear Programming model and solved within an iterative algorithm for the handling of Paradoxically Accepted Orders (PAOs). The modeling framework allows the coordination of two distinct market setups, i.e., the self-dispatch and central dispatch. To this end, a BEO conversion pre-process is executed for markets applying the central-dispatch setup, in order to attain the BE quantities for inclusion in the CMOL. The proposed model is evaluated using a test case including six countries that participate in the TERRE project (Portugal, Spain, France, Great Britain, Switzerland, Italy) as well as Greece.