Distribution Locational Marginal Price for Grid-Connected Microgrids in Real-Time Balancing Market

The large-scale penetration of distributed energy resources (DERs) into the power grid has boosted the development of grid-connected microgrids. The bi-directional power flows at the point of common coupling (PCC), as well as the considerable flexibility of microgrid power dispatch, inspires the idea of utilizing microgrids as a supplementary source for real-time power balancing. In this paper, a real-time price signal based on the concept of distribution locational marginal price (DLMP) is developed to drive grid-connected microgrids to make up for the power imbalance of the upper level transmission system. The incentive price signal is derived from a linearized optimal power flow (LOPF) model due to its simplicity and computational efficiency. Furthermore, to achieve an equilibrium status among all entities (DSO and microgrids), the LOPF model is extended to include the KKT conditions of the individual microgrid optimization problem to ensure the local profits. This coordinated operation model is tested on the IEEE 123-bus distribution system, and is also compared with an ACOPF model to fully verify its accuracy and fast convergence.