Hierarchical coordination of TSO-DSO economic dispatch considering large-scale integration of distributed energy resources Zhao Yuan ⇑ , Mohammad Reza Hesamzadeh Department of Electric Power and Energy Systems, KTH Royal Institute of Technology, Stockholm, Sweden highlights  A hierarchical coordination mechanism to coordinate the dispatch of TSO and DSO.  A convex AC optimal power flow (AC OPF) model to calculate power flows.  A unified communication format for TSO and DSO communication.  A parallel computation algorithm to accelerate the coordinated dispatch.  The effect of DERs on the voltage amplitude and phase angle are investigated. article info Article history: Received 9 November 2016 Received in revised form 8 February 2017 Accepted 10 March 2017 Keywords: DERs Economic dispatch Hierarchical coordination Generalized bid function Benders decomposition Grid computing abstract This paper proposes a hierarchical coordination mechanism for coordinating the economic dispatch of transmission system operator (TSO) and distribution system operator (DSO). The challenge of dispatching large-scale distributed energy resources (DERs) is addressed. The coordination problem of dispatching energy and reserve is formulated. Benders decomposition is the underlying mathematical foundation of the proposed hierarchical coordination mechanism. We define the generalized bid function to approx- imate the dispatch cost of distribution network by a series of affine functions. The generalized bid func- tion is communicated from DSO to TSO. By using convex AC optimal power flow model, the convergence of hierarchical coordination is guaranteed. A grid computing structure in General Algebraic Modeling System (GAMS) to accelerate the computation is proposed. The generalized bid function is simulated for various test cases. We also demonstrate the effect of DERs on the voltage magnitude and phase angle. The numerical results show that the hierarchical coordination using the generalized bid function con- verges to very close results compared with the results of centralized dispatch. Hierarchical coordination is capable of managing various network congestion scenarios and power loads. The generalized bid func- tion provides a unified format of communication between TSO and DSO. Ó 2017 Elsevier Ltd. All rights reserved. 1. Introduction The large scale integration of distributed energy resources (DERs) in the distribution network is profoundly reshaping the operation of entire power system [1–3]. Due to the great technical and economic benefits from DERs [2,4], various support schemes for DERs such as tax reduction, feed-in tariff and subsidy have been implemented around the world [1]. As a good example, electric vehicle (EV) owners in the Netherlands can save around 5300€ over four years because of the incentive policies from the government [1]. The support schemes from the government together with technology advancement create an inevitable future of large- scale integration of DERs in distribution network. Despite the proved benefits that DERs can provide [5,6], DERs are also challenging TSO and DSO to operate the power network in a more coordinated mode [7–10]. It is critical to coordinate the access of resources and data management between TSO and DSO to fully release the potential flexibilities from DERs [7,8]. These flexibilities include balancing supply and demand, network congestion management and voltage control. Ref. [10] investigates six grid operation challenges and possible future cooperations between TSO and DSO. The operation challenges mentioned in [10] include congestion of transmission-distribution interface, con- gestion of transmission lines, balancing, voltage support, black start and protection. By analyzing the Generalized Nash Equilibri- ums (GNEs) of incremental coordination scenarios between the http://dx.doi.org/10.1016/j.apenergy.2017.03.042 0306-2619/Ó 2017 Elsevier Ltd. All rights reserved. ⇑ Corresponding author. E-mail address: yuanzhao@kth.se (Z. Yuan). Applied Energy 195 (2017) 600–615 Contents lists available at ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy