Integrating Distributed Flexibility into TSO-DSO Coordinated Electricity Markets

The future of electricity markets is envisioned to be heavily based on renewable generation and distributed flexibility. Yet, integrating existing distributed flexibility into market decisions poses a major challenge, given the diversity of consumers' modeling frameworks and controllers. Moreover, in such a system, the market's decisions need to be predictive, adaptive, as well as TSO-DSO coordinated. In this paper, we present an iterative market procedure through which, in contrast to traditional electricity markets based on one-off bids, flexible participants can indirectly implement their model by repeatedly responding to tentative pricing signals. This, combined with a scheduling/forecasting grey-box agent introduced on the consumer side, allows for the seamless integration of existing flexible loads' control schemes into a holistic electricity market. The proposed market-operation policy inherently coordinates Transmission and Distribution System Operators' decisions in the presence of uncertain distributed flexibility and renewables' generation. The results demonstrate promising convergence properties and short execution times, which is encouraging towards the scheme's practical applicability.