Minimization of distribution system losses by exploiting storage and anticipating market-driven behaviour of wind power producers

This paper presents a stochastic bi-level optimization model to determine the optimal dispatch of energy storage systems controlled directly by the distribution system operator (DSO) in order to achieve minimization of active power losses, taking into account the profit-driven participation of wind-power producers (WPPs) connected to the distribution system, in the day-ahead and imbalance markets. The upper-level optimization problem represents the optimal AC power flow problem with the objective of minimizing the active power losses from the perspective of the DSO, while the lower-level optimization problem models the profit maximization problem faced by a competitive wind producer under uncertainty associated with market prices and its own power production profile. By exploiting the convexity of the lower-level problem, the Karush-Kuhn-Tucker conditions of the latter are derived, and the bi-level problem is cast as a single level optimization problem. A simple case study of a radial distribution system, featuring one WPP and one storage device is used to illustrate the workings of the method.