Competitive and Cooperative Approaches to the Balancing Market in Distribution Grids

The electrical grid has been changing in the last decade due to the presence, at the distribution level, of renewables, distributed generation, storage systems, microgrids, and electric vehicles. The introduction of new legislation and actors in the smart grid’s system opens new challenges for the activities of companies, and the development of new energy management systems, models, and methods. In order to face this revolution, new market structures are being defined as well as new technologies and optimization and control algorithms for the management of distributed resources and the coordination of local users to contribute to active power reserve and ancillary services. One of the main problems for an electricity market operator that also owns the distribution grid is to avoid congestions and maximize the quality of the service provided. The thesis concerns the development and application of new methods for the optimization of network systems (with multi-decision makers) with particular attention to the case of power distribution networks This Ph.D. thesis aims to address the current lack of properly defined market structures for the determination of balancing services in distribution networks. As a first study, to be able to handle the power flow equation in a computationally better way, a new convex relaxation has been proposed. Thereafter, two opposite types of market structure have been developed: competitive and cooperative. The first structure presents a two-tier mechanism where the market operator is in a predominant position compared to other market players. Vice versa in the cooperative mechanism (solved through distributed optimization techniques ) all actors are on the same level and work together for social welfare. The main methodological novelties of the proposed work are to solve complex problems with formally correct and computationally efficient techniques.