Coordinated Wholesale and Retail Market Mechanism for Providing Demand-side Flexibility

With the trend of electricity market deregulation for recent decades, the consumers at demand-side are progressively encouraged to trade the power in competitive market environment. Conventionally, only large-scale consumers participate directly in the wholesale market that adopts spot energy pricing. Most small-scale consumers are involved in the retail market that offers non-varying tariff predefined by retailers or utility companies. In this work, we investigate a framework of coordinated wholesale and retail market structure that enables consumers in the retail market to reflect the spot price and improve the power system flexibility for the high penetration of renewables. Then, market behaviors of demand-side participants with the proposed market mechanism and some related business models are discussed. The following participation modes for consumers could be opted including: direct trade, trade agented by retailers or organized in virtual power plant (VPP). For a pool-based trade at demand-side, a bi-level market clearing mechanism at transmission and distribution levels is explained. This mechanism seeks to optimize the global demand profile for hosting renewables while solving the operating constraint of loads and local networks. This study can offer constructive advises to promote further development of China’s electricity market.