Management of Risk and Uncertainty Through Optimized Co-Operation of Transmission Systems and Microgrids With Responsive Loads (Final Report)
The evolution of the power system to the reliable, efficient and sustainable system of the future will involve development of both demand- and supply-side technology and operations. Ambitious national and state-level goals around the decarbonization of electricity relies on the integration of very high levels of renewable resources, most of which are variable and intermittent. The use of demand response is an ideal approach to counterbalance the intermittency of renewable generation and brings the consumer into the spotlight. Though individual consumers are interconnected at the low-voltage distribution system, these resources are typically modeled as variables at the transmission network level. Demand-side participation cannot be leveraged effectively without explicitly including the distribution system dynamics in the optimization-based wholesale market operations. This project grew from a vision for co-optimized interaction of distribution systems, or microgrids, with the high-voltage transmission system. In this framework, microgrids encompass consumers, distributed renewables and storage. The energy management system of the lower voltage system (distribution or microgrid) can also sell (buy) excess (necessary) energy from the transmission system. Until recently, very little research had been conducted on the co-optimization of these two systems due to computational limitations. However, advances in computational capabilities, and the judicious use of decomposition methods and innovative approximation methods for high-dimension dynamic programming made this goal a viable objective for this project, leading to a fundamental shift in the ability to integrate and fully utilize demand-side resources. To this end, the modeling framework developed introduces a novel co-optimization framework, to include the operations of both the transmission and distribution systems (or microgrids) in operational decision making. This framework was used to analyze renewable and distributed generation along with responsive demand and to compare the capability of co-optimized systems to perform with higher levels of variable renewables. An ideal microgrid is defined as an electric entity capable of operating in both interconnected (with the high-voltage grid) and islanded mode. As such, the microgrid should incorporate generating units (traditional units and intermittent) and if needed, exchange power with the high-voltage grid. The interplay between the microgrid and high-voltage grid motivated the development of the co-optimization approach to ensure efficient performance of the interconnected network. Results show that the use of a bi-level optimization approach is an appropriate structure, capable of co-optimizing a transmission system with multiple distribution systems and microgrids. While increasing the number of connected systems provides increasing flexibility for renewables integration this can also the economic benefits to the low-voltage subsystems with each additional system connected. Comparison of a traditional single-level decision structure with the co-optimization approach illustrates a reduction in overall system cost under co-optimization, while specific cost allocations to transmission and distribution systems are changed.