Techno-economic analysis and simulations of the transmission and distributions systems interactions in different regulatory frameworks

The paper presents a procedure for simulating the operation of a power system that integrates centralized and distributed generation with active customers, where all players may contribute to system security and adequacy by offering regulated or market-driven services such as demand response and voltage regulation. Although the approach is of general applicability, in this work the simulations are carried out with reference to the regulatory scenarios proposed by the Italian Regulatory Authority and the role of active distribution grids and of the different actors connected to them (i.e. fossil and renewable distributed generation as well as active customers) is analysed in terms of their capabilities to offer support to transmission system stability. The procedure is structured as follows: - Distribution networks underlying each primary substation in a given area of the transmission network are described through representative models that are tuned with respect to the network topology, level of demand, share of active demand and generation on the network, etc.; - The distributed service providers connected to each primary substation (namely, customers and distributed generators) offer their own services to the ancillary service markets, in compliance with the specific rules of the regulatory scenario being analyzed; - Offers are technically assessed by taking into account the characteristics of the relevant distribution network in terms of regulation capabilities, power flows and line exploitation; - The bids for those services that are required for grid stability are then placed in the bulk (transmission grid) market for ancillary services, in order to compete with services offered by the other traditional players like thermoelectric power plants. The paper presents the results of simulations applied to a representative portion of the Italian power system. The participation of different players not only to the distribution network operation but also to bulk system services markets (e.g. power reserve and adequacy) is discussed with a scenario analysis.