Co-Optimization of Distributed Renewable Energy and Storage Investment Decisions in a TSO-DSO Coordination Framework

As Distributed Energy Resources (DER) penetration levels and distributed flexibility investments are continuously growing, various smart grid actors need to coordinate their decisions towards optimal DER siting sizing: First, profit-based Service Providers (ESPs) want secure long-term profits avoid economically unsustainable investments. Second, Distribution System Operators (DSOs) ensure the reliable operation of networks in an way. Third, Transmission (TSOs) optimally exploit available “clean” DERs close collaboration with downstream DSOs. In this paper, we propose a novel ESP-DSO-TSO coordination scheme co-optimize renewable energy storage planning at distribution network level, while modeling coordinated TSO-DSO operations. We formulate bi-level program, upper-level which minimizes DSO's costs, ensuring minimum rate return on ESP's investments, lower-level models transmission network-constrained wholesale market. A nested decomposition technique is used achieve computational tractability. Simulation results showcase trade-off analysis between sustainable system cost minimization prove that interaction can benefit all involved certain extent. Finally, efficiency proposed algorithm demonstrated via numerical results.