Clearing and Pricing For Network-Aware Local Flexibility Markets Using Distributed Optimization

Along with the rising installation of distributed energy resources, the demand for flexibility and the management of such is of growing interest. This paper proposes a network-aware local flexibility market scheme, which is triggered by an upstream flexibility request and orchestrated by the distribution system operator (DSO). The consensus alternating direction method of multipliers (CADMM) is used to clear the market. The flexibility locational marginal price (FLMP) for each EC is derived from the nodal balance constraint. The market mechanism is tested using a ring network with a tie switch. The provision of flexibility and the formation of FLMP is analyzed considering a congested and non-congested state of the network. While no congestion occurs, the FLMP reaches an equilibrium price for all ECs. In case of congestion, the prices in the congested parts of the network drop, alongside an increase in the non-congested parts.