Forming multi-transmission-node distributed energy resource aggregations in wholesale energy market: An optimal node aggregation approach and admissible capacity expansion regions

To manage a large fleet of distributed energy resources (DERs) over wide geographic areas and facilitate their wholesale energy market integration, multi-transmission-node DER aggregation (M-DERA) covering DERs across multiple transmission nodes has emerged in industrial practice. However, integrating the concept of M-DERAs into wholesale market operations presents new challenges for regional transmission organizations (RTOs), particularly in evaluating transmission line flows, as accurately determining the sensitivity of an M-DERA to the power flow of a transmission line remains difficult. To address the challenge, this paper explores an optimal node aggregation approach to derive the effective M-DERA formation scheme, by balancing the DER aggregation intensity (measured by the average capacity of M-DERAs) and the maximum line flow calculation error (evaluated by the difference between line flows calculated via aggregated sensitivities of M-DERAs and exact sensitivities of individual transmission nodes). Moreover, after M-DERAs are optimally formed, their continued capacity expansions could further deteriorate line flow calculation errors. To this end, a multi-parametric optimization-based approach is proposed to calculate admissible capacity expansion regions (ACERs), which concisely describe the acceptable nodal capacity expansion ranges with respect to the RTO's preference on line flow calculation errors to assist M-DERAs’ complex expansion planning process. Results on a modified IEEE 24-bus system validate that the proposed optimal M-DERA formation scheme outperforms all other aggregation options with reduced line flow calculation errors as well as alleviated transmission line overloading in real-time operations, and that ACERs can effectively guide nodal DER capacity expansions to meet the required level of line flow calculation errors.