Modeling the Strategic Behavior of an Active Distribution Network in the ISO Markets

Abhijith Ravi, Linquan Bai, Valentina Cecchi, Yaosuo Xue, Fei Ding

Research output: Contribution to conferencePaperpeer-review

2 Scopus Citations


With increasing integration of distributed energy resources (DERs), active distribution networks (ADNs) can actively participate in the electricity markets by dispatching their DERs, which can change the existing electricity market paradigm. It is essential to investigate the strategic behaviors of ADNs and their DER dispatch when they participate in the wholesale market as price-makers. This paper proposes a bi-level optimization model to study the strategic behavior of an ADN in both energy and reserve markets. The optimal scheduling of DERs in the ADN is modeled as the upper level problem and the joint energy and reserve market-clearing of the ISO is modeled as the lower-level problem. The two-level optimization models exchange bidding information and energy/reserve prices with each other. The proposed bi-Ievel optimization problem is converted to a mathematical programming with equilibrium constraints (MPEC) by using Karush-Kuhn Tucker (KKT) conditions and strong duality theory. Further, the MPEC problem is reformulated as a computationally-solvable mixed integer second order cone programming (MISOCP) model. The simulation results on an illustrative case demonstrate the impact of the strategic bidding of the ADN on the day-ahead energy and reserve market prices.

Original languageAmerican English
Number of pages5
StatePublished - 2021
Event2021 IEEE Power and Energy Society General Meeting, PESGM 2021 - Washington, United States
Duration: 26 Jul 202129 Jul 2021


Conference2021 IEEE Power and Energy Society General Meeting, PESGM 2021
Country/TerritoryUnited States

Bibliographical note

Publisher Copyright:
© 2021 IEEE.

NREL Publication Number

  • NREL/CP-5D00-82302


  • active distribution network
  • bilevel optimization
  • day-ahead market
  • mathematical program with equilibrium constraints
  • strategic bidding


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