PNNL

The use of small-scale energy resources, particularly rooftop solar panels and battery storage, continues to grow. These power system devices, known collectively as distributed energy resources (DERs), continue to grow in popularity because of regulatory, policy, and market shifts. Their rapid expansion is transforming the way electricity is generated, traded, delivered, and consumed. This significant market shift requires that steps be taken to ensure small DERs are given a level playing field with traditional resources. Legacy market processes were designed for a power grid consisting largely of centralized power plants. In contrast, DERs consist of many small devices with distinct operating characteristics that may or may not even be connected at the transmission interconnection points, limiting their visibility to the system operator. It will be infeasible to allow individual DERs to participate directly in wholesale markets, so the Federal Energy Regulatory Commission has issued new rules to support DER participation via resource aggregations. Market operators will need enhanced software tools to support this new form of market participation.

The key software tool used to schedule resources in wholesale markets is an optimization problem called unit commitment. Unit commitment formulations that do not account for inherent uncertainty of DER responses and locational attributes can lead to unstable, sub-optimal, or even infeasible market solutions. High-fidelity unit commitment and dispatch modeling can improve the accuracy of results but can lead to increased computational burden on market operators. DER dispatch models that account for power flow in distribution networks may also lead to administrative burden on DER aggregators due to additional data requirements. Tradeoffs between desired accuracy of results and reduced complexity of the solution process need to be studied more extensively.