A Game Theory Based Retail Market Framework With DSO’s Operational Considerations

Within the distribution system operator (DSO) framework, there could be alternative arrangements to enable market participation by all entities, including the privately owned distributed energy resources (DERs). In many cases, the retailers and similar aggregating agencies facilitate this. Even before finalizing the modalities of the market at the distribution level, it is essential to know about the possible market outcome and its impact on the operational decisions of DSO and vice-versa. This paper presents a simulation framework and associated case studies, where the market outcome and DSO’s operational activities are carried out in tandem to establish a realistic and feasible outcome. The market model is represented by a non-cooperative game where an efficient and fair solution is obtained using Nash equilibrium. For this, multi-player power transaction problem (MPTP) is solved using complementarity modeling. The proposed MPTP is further compounded with network reconfiguration and loss considerations which are the part of DSO’s operations. The inclusion of reconfiguration and loss allocation to entities makes the outcome realistic and feasible one. The proposed simulation framework is implemented on various test cases with a heterogeneous set of participants to establish its effectiveness.