Decomposition and Equilibrium Achieving Distribution Locational Marginal Prices Using Trust-Region Method

We propose a new distribution locational marginal price (DLMP) model which is based on a linearized variant of the global energy balance formulation along with trust-region-based solution methodology. Compared to existing DLMP works in the literature, the proposed DLMP model has shown to depict the following features: 1) it decomposes into most general components, i.e., energy, loss, congestion, and voltage; 2) it presents market equilibrium conditions; and 3) it is capable of achieving an efficient flexibility resource allocation in local day-ahead distribution grid markets. The developed model is tested first on a benchmark IEEE 33-bus distribution grid and then on much larger grids with the inclusion of dispatch from flexible loads and distributed generators.