Distribution Market Clearing and Settlement

Abstract: There are various undergoing efforts by system operators to set up an electricity market at the distribution level to enable a rapid and widespread deployment of distributed energy resources (DERs) and microgrids. This paper follows the previous work of the authors in implementing the distribution market operator (DMO) concept, and focuses on investigating the clearing and settlement processes performed by the DMO. The DMO clears the market to assign the awarded power from the wholesale market to customers within its service territory based on their associated demand bids. The DMO accordingly settles the market to identify the distribution locational marginal prices (DLMPs) and calculate payments from each customer and the total payment to the system operator. Numerical simulations exhibit the merits and effectiveness of the proposed DMO clearing and settlement processes.