Stochastic Multi-objective Bi-level Optimization Model for Operation of Active Distribution System with Demand Response

Abstract

In this work, a multi-objective (MO) bi-level (BL) model for interaction between distribution system operator (DSO) and demand response (DR) aggregators is developed. In the upper level, the objectives of DSO are to jointly optimize its profit and energy not supplied (ENS) while maximizing profit is the objective at lower level from DR aggregator’s perspective. The upper level MO problem is transformed into a single objective optimization using $\epsilon$-constraint method. And, the BL problem is converted into a single level structure using Karush-Kuhn-Tucker (KKT) conditions and strong duality theorem. In addition, stochastic AC power flow is applied to address uncertain natures of grid electricity prices, inflexible load demand and power from wind and solar respectively. Numerical results on a modified 33-bus distribution system demonstrate the effectiveness of the proposed bi-level approach.