Economic Optimization of Electricity Supply Security in Light of the Interplay between TSO and DSO

In this paper, the cooperation between Transmission System Operator (TSO) and Distribution System Operator (DSO) for power balancing of the transmission system is analyzed, whereby an exemplary grid situation is simulated. Based on the model, an optimization problem is formulated for the utilization of flexible demand and generation. The objective of this study is the economically optimal usage of flexibilities in consideration of the known grid constraints. For this purpose, two optimization problems are being presented: the optimal deployment of flexibilities for the support of redispatch measures and the optimal application of the available flexible units as secondary reserve product in the given ancillary services scheme. In order to discuss different grid types, technical changes, as well as market and price structures, the respective optimization parameters are being defined. For instance, regarding the availability of flexibility units, PV and load profiles need to be analyzed in greater detail. Furthermore, the price sensitive function is shown, revealing fixed flexibility prices and a variable price-demand diagram. Three scenarios are being analyzed, giving examples of typical developments of the communication infrastructure with regard to a stronger TSO and DSO cooperation. The results quantify the potential of flexibilities as redispatch support and secondary reserve product, applying the above mentioned different parameters. We find that using distributed flexibilities is economically not suitable for the application as redispatch support. However, due to the presently high remuneration in the secondary reserve market, the utilization of distributed flexibilities can significantly lower the costs of the TSO operation.