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TSO-DSOs Stable Cost Allocation for the Joint Procurement of Flexibility: A Cooperative Game Approach

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  • Anibal Sanjab
  • H'el`ene Le Cadre
  • Yuting Mou

Abstract

In this paper, a transmission-distribution systems flexibility market is introduced, in which system operators (SOs) jointly procure flexibility from different systems to meet their needs (balancing and congestion management) using a common market. This common market is, then, formulated as a cooperative game aiming at identifying a stable and efficient split of costs of the jointly procured flexibility among the participating SOs to incentivize their cooperation. The non-emptiness of the core of this game is then mathematically proven, implying the stability of the game and the naturally-arising incentive for cooperation among the SOs. Several cost allocation mechanisms are then introduced, while characterizing their mathematical properties. Numerical results focusing on an interconnected system (composed of the IEEE 14-bus transmission system and the Matpower 18-bus, 69-bus, and 141-bus distributions systems) showcase the cooperation-induced reduction in system-wide flexibility procurement costs, and identifies the varying costs borne by different SOs under various cost allocations methods.

Suggested Citation

  • Anibal Sanjab & H'el`ene Le Cadre & Yuting Mou, 2021. "TSO-DSOs Stable Cost Allocation for the Joint Procurement of Flexibility: A Cooperative Game Approach," Papers 2111.12830, arXiv.org.
    • Handle: RePEc:arx:papers:2111.12830
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    References listed on IDEAS

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    1. Anibal Sanjab & Yuting Mou & Ana Virag & Kris Kessels, 2021. "A Linear Model for Distributed Flexibility Markets and DLMPs: A Comparison with the SOCP Formulation," Papers 2111.02328, arXiv.org.
    2. Le Cadre, Hélène & Mezghani, Ilyès & Papavasiliou, Anthony, 2019. "A game-theoretic analysis of transmission-distribution system operator coordination," European Journal of Operational Research, Elsevier, vol. 274(1), pages 317-339.
    3. Tijs, S.H. & Driessen, T.S.H., 1986. "Game theory and cost allocation problems," Other publications TiSEM 376c24c5-c95d-4d29-96b6-4, Tilburg University, School of Economics and Management.
    4. S. H. Tijs & T. S. H. Driessen, 1986. "Game Theory and Cost Allocation Problems," Management Science, INFORMS, vol. 32(8), pages 1015-1028, August.
    5. Schittekatte, Tim & Meeus, Leonardo, 2020. "Flexibility markets: Q&A with project pioneers," Utilities Policy, Elsevier, vol. 63(C).
    6. Frisk, M. & Göthe-Lundgren, M. & Jörnsten, K. & Rönnqvist, M., 2010. "Cost allocation in collaborative forest transportation," European Journal of Operational Research, Elsevier, vol. 205(2), pages 448-458, September.
    7. Hélène Le Cadre & Ilyès Mezghani & Anthony Papavasiliou, 2019. "A game-theoretic analysis of transmission-distribution system operator coordination," LIDAM Reprints CORE 2996, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Gerard, Helena & Rivero Puente, Enrique Israel & Six, Daan, 2018. "Coordination between transmission and distribution system operators in the electricity sector: A conceptual framework," Utilities Policy, Elsevier, vol. 50(C), pages 40-48.
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    Cited by:

    1. Leandro Lind & Rafael Cossent & Pablo Frias, 2022. "TSO-DSO Coordination for the Procurement of Balancing and Congestion Management Services: Assessment of a meshed-to-meshed topology," Papers 2209.02360, arXiv.org.

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