DER-inverter based reactive power ancillary service for supporting peer-to-peer transactive energy trading in distribution networks

Abstract

Fast proliferation of distributed energy resources (DERs) and emergence of peer-to-peer (P2P) energy trading are introducing significant operation challenges to distribution networks. This paper designs a multi-timescale reactive power ancillary service trading framework in this context. The framework consists ofa contract-based day-ahead Var reserve service trading stageandan hourly-ahead Var support service trading stage. At the day-ahead stage, the distribution system operator (DSO) signs a robust Var reserve contract with inverter-interfaced DERs which have sufficient Var capacity, and the problem is formulated as a two-stage robust optimization model considering uncertain nodal loads and hourly-ahead market behaviors. As an important advantage, the robust Var reserve contract eliminates the potential market power that the DERs may gain due to system configuration deficiency and market structure flaws at the later hourly-ahead trading stage. After uncertainty realization, at the hourly-ahead stage, DERs further provide the DSO with paid hourly-ahead Var supports using their spare Var capacity. The bilateral hourly-ahead Var trading between the DSO and DERs is modelled as a non-cooperative game. To attain a generalized Nash equilibrium (GNE) of the non-cooperative game, a distributed algorithm is developed by building the connection between the GNE and the primal-dual solution of a related social cost minimization problem. The proposed framework and methods are tested on t…