A distributed market-clearing framework for highly interconnected electricity and gas systems

The increasing share of renewable energies required for decarbonization drives the search for flexibility to cope with the variability of those energy sources, while the ongoing digitalization enables the interaction of market participants. One potentially attractive solution to tackle this challenge is to use cross-sectoral flexibility resources via an improved coordination of energy markets. Therefore, this paper proposes and assesses a distributed market-clearing (DMC) framework for coupling the short-term market and system operation of integrated energy systems, based on a limited exchange of information and preserving the independence of market agents and network operators. Using decomposition techniques, we derive distinct subproblem formulations for the units and the network operators. We introduce the corresponding components of the DMC subproblems, and describe their economic and technical properties. Furthermore, we demonstrate that the solution of this DMC is equivalent to the results of an omniscient single operator. Even though the framework is potentially suitable for coupling multiple sectors, we specifically focus on the coordination of electricity and gas systems that are coupled via gas-fired power plants and power-to-gas units. Within the application section, we demonstrate the robustness and convergence of the proposed framework in a case study for Germany. Furthermore, we identify and investigate coordination parameters that potentially improve the DMC’s convergence while reducing volatility between iterations.