Distributed Energy Resources (DERs), such as renewable energy sources for carbon neutrality, are being increasingly integrated into distribution networks at a large scale. While DERs offer significant environmental benefits, their inherent variability...
Distributed Energy Resources (DERs), such as renewable energy sources for carbon neutrality, are being increasingly integrated into distribution networks at a large scale. While DERs offer significant environmental benefits, their inherent variability increases the complexity of distribution system operation and leads to growing challenges such as voltage fluctuations, reverse power flows, and line congestion. To address these issues, conventional distribution system operation has relied on curtailment commands issued by the Distribution System Operator (DSO) to regulate DER generation. Although this approach is effective in ensuring system security and stability, it has limitations in adequately guaranteeing the economic performance of DER operators. In particular, curtailment strategies based on single OPF formulations are effective in alleviating network congestion but primarily focus on minimizing DSO operating costs, without explicitly considering the revenue of DER operators.
This paper proposes a bi-level optimization–based DER scheduling method that simultaneously considers the perspectives of the DSO, whose objective is to minimize operating costs under network congestion conditions, and DER operators, whose objective is to maximize revenue through power generation. The upper level is formulated as the DSO, and the lower level is formulated as the DER operators, enabling the simultaneous modeling of both stakeholders’ objectives. Furthermore, to integrate the conflicting objectives of the two levels into a unified optimization framework, the lower-level optimization problem is reformulated as a set of upper-level constraints using a Lagrangian-based Karush–Kuhn–Tucker (KKT) conditions. The proposed bi-level optimization– based DER scheduling framework provides a practical distribution system operation strategy that simultaneously ensures system stability and improves DER economic performance.