Wholesale Market Participation of DER Aggregators: A Multi-Stage Robust Optimization Approach for DSO-DERA Coordination

Integrating distributed energy resources (DERs) into the wholesale energy market through aggregation could offer enhanced grid flexibility and efficiency. However, effectively realizing such benefits remains challenging due to potential operational conflicts between DER aggregators (DERAs) and the distribution system operator (DSO). To address the challenge, this paper proposes a DERA operating profile verification-based DSO-DERA coordination method to facilitate DERAs' direct participation in the day-ahead wholesale energy market while maintaining the operational safety of the distribution system. Specifically, the day-ahead operating envelope (DAOE) is proposed to quantify the DER operating ranges for market participation. The DSO is responsible for verifying the DAOE submitted by DERA and determining necessary adjustments to ensure safe and economically efficient distribution system operations. Due to the limited transparency of DERAs' internal operations to DSOs, DER operations are treated as uncertainties from the DSO's perspective. Accordingly, the proposed model is formulated as a multi-stage robust optimization problem with an optimizable uncertainty set. The model is solved using an affine policy-based approach with linearization techniques to reduce computational complexity. Case studies validate the method's effectiveness by comparing with nonlinear programming solvers. Compared to common stochastic optimization models, the proposed approach sacrifices only 0.9% of economic efficiency on the 141-bus system to achieve multi-stage robustness in system operations.