Integrated day-ahead and hour-ahead operation model of discos in retail electricity markets considering DGs and CO2 emission penalty cost

This paper proposes a new framework for the operation of distribution companies (discos) in the liberalized electricity market environment considering distributed generation (DG) units and carbon dioxide (CO2) emission penalty cost. The proposed short-term framework is a two-stage model. The first stage, namely day-ahead stage, deals with the activities of discos. This stage includes a optimization problem to minimize the costs of distribution company (operational and CO2 emission costs). The first stage is formulated as a mixed integer nonlinear programming (MINLP) framework using the Benders decomposition to determine the decisions of discos to buy power from grid, schedule the DG units and contract with interruptible loads (ILs). The results of the first stage are imposed as the boundary constraints in the second stage which deals with the activities of discos in an hour-ahead period. In the hour-ahead stage, the retailers determine the amount of purchased active and reactive power from the grid and the production of each DG unit in the energy and reserve market keeping in mind its day-ahead decision to maximize the desired short-term profit. Finally, the efficiency of the proposed framework is studied on a case study.

► A two-stage framework for discos’ operation is proposed in electricity markets considering DG units and CO2 emission.
► The proposed model considers the day-ahead and hour–ahead scheduling of discos in retailer market, simultaneously.
► Interruptible load contracting is considered in the day-ahead scheduling.
► Reserve scheduling and its market impacts on the disco activities are considered in daily revenue function.
► Benders decomposition algorithm is implemented to obtain global results of day-ahead decision.