Operations Research 2025
Abstract Submission

209. Modelling incentive mechanisms for grid-serving flexibility provision using bi-level programming with mixed-integer lower level

Invited abstract in session WC-3: Energy planning and policy, stream Energy and Sustainability.

Wednesday, 13:30-15:00
Room: H5

Authors (first author is the speaker)

1. Tizian Schug
Institute for Operations Research and Information Systems, Hamburg University of Technology
2. Kathrin Fischer
Institute for Operations Research and Information Systems, Hamburg University of Technology (TUHH)

Abstract

Transmission grid congestion management (CM) requires transmission system operators (TSOs) to adjust the market-based dispatch of individual generators in order to address transmission grid constraints in a cost-effective manner. As the grid experiences increased stress due to the integration of renewable energies and higher demand from flexible sector coupling technologies, there is an increasing need for innovative CM solutions to efficiently manage future grid bottlenecks. While flexible demand-side applications can further strain electricity grids, they also present new opportunities for TSOs to implement CM strategies. Employing incentive mechanisms could be a promising strategy to leverage demand-side flexibility for CM. The interactions of a TSO, an energy aggregator and the market following such an approach can be modelled as a bi-level program.

In this work, we explore the integration of battery storage systems (BESSs) into the model. By allowing integer variables in the lower level of the model, we gain advantages such as restricting arbitrage trading of the BESSs or incorporating more technical properties of other distributed energy resources involved in the CM process. However, this addition means that the commonly used reformulation based on the Karush-Kuhn-Tucker (KKT) conditions can no longer be applied to solve the model. To address this challenge, we present possible solution approaches from the literature and investigate them with respect to their applicability to the problem at hand. Finally, we draw conclusions on the potential of residential BESSs for congestion management in the transmission grid using the proposed incentive mechanism.

Keywords

Status: accepted

Back to the list of papers