Optimal market participation of VPPs in TSO-DSO coordinated energy and flexibility markets

An insufficient coordination between transmission system operator (TSO) and distribution system operator (DSO) can hinder the benefits of the virtual power plant (VPP), such as providing effective grid services, participation to the markets, etc., eventually resulting reduced system economy and flexibility. To address the issue, this work develops an optimal market model for VPPs when participating in both TSO-DSO coordinated energy and flexibility markets considering the renewables uncertainties. More specifically, the optimal participation model for VPPs consists of three sub-problems: market clearing at the transmission level directed by the TSO, market clearing at the distribution level managed by the DSO, and the optimization of VPPs operation strategies. Additionally, a distributed solution algorithm, alternating direction method of multipliers with self-adaptive penalty parameter (adaptive-ADMM), is employed to solve the proposed model and preserve multiple stakeholders' data privacy. The T30-D33 and T118-D85 + D2 × 69 test systems are adopted to evaluate the performance of the proposed model and solution method, the simulation results show the proposed model can reduce the operation cost for TSO, DSO, and VPPs, and the adaptive-ADMM can reduce the computational time by a 44.05%.