Efficient Distributed DSO Auction with Linearized Grid Constraints

This research describes an approach to implement a bi-level decentralized auction mechanism in transactive energy markets. At the lower level, a set of aggregators obtain energy demands of prosumers in their vicinity. The upper level is realized by the DSO, which maximizes the total utilities of all prosumers while maintaining prosumer privacy. The underlying constrained optimization problem is solved using the augmented Lagrangian method. Simulation results indicate that aggregators with higher demands and lower generations are charged at relatively higher rates. Furthermore, as aggregators that are further away from the DSO tend to constrain the grid more, their prosumers are also associated with higher energy costs.