A two-stage market-based TSO-DSO coordination framework

This paper introduces a novel two-stage market-based TSO-DSO coordination framework. The proposed framework is harmonized with existing Day-Ahead markets and respects the privacy requirements of the TSO and the DSOs. It consists of a TSO and multiple DSO markets that are cleared sequentially. DSO markets are cleared first and seek to provide to the DSO a platform for congestion management. The DSO markets allow for indirect sharing of resources between the networks, using a carefully designed pricing scheme. Importantly, the DSO market also considers the losses of the distribution network and the effect of reactive power flows at the point of common coupling. The objective of the TSO market is to provide congestion management to the TSO and restore the balance of the system (which may be altered by the DSO markets). The effectiveness of the proposed framework is demonstrated via a case study.