Designing a joint market for procurement of transmission and distribution system services from demand flexibility

In this paper, we propose a market framework for joint procurement of transmission and distribution system services from demand flexibility. To better illustrate the idea, we use the Danish market for tertiary control reserves as an example of a market that can be linked to a potential distribution system market for congestion management services. We discuss the details of the market design and formulate the joint market clearing procedure where demand flexibility offers are allocated to either transmission system service or distribution system service. A numerical example illustrates the economic benefit of the joint market clearing, and we further discuss some other advantages of the proposed design.