Flexibility Clearing in Joint Energy and Flexibility Markets Considering TSO-DSO Coordination

Active distribution networks (ADNs) with distributed generators (DGs) can provide flexibility for the upstream grid by participating in energy and flexibility markets. In this paper, a novel market-clearing model is proposed to facilitate energy and flexibility transactions through coordinating the flexibility providers in both transmission and distribution networks. The energy and flexibility market-clearing problem is formulated as a bi-level optimization model. The upper-level models the transmission-level joint energy and flexibility market clearings while the lower-level represents the distribution-level ADN market clearings. In the proposed model, the locational marginal prices (LMP) at the coupling bus will affect the dispatch of DGs and power demands of the ADNs. In turn, the power demands of the ADNs and the offers submitted by DGs will affect energy and flexibility market-clearing results and the LMPs as well. Karush-Kuhn-Tucker (KKT) conditions and the duality theory are used to transform the proposed nonlinear bi-level model to a single-level mathematical program with equilibrium constraints (MPEC) model. Case studies verify the effectiveness of the proposed model.