On the Co-Simulation of Energy Markets in Distribution Systems

JOHN THEISEN

In the United States, the power system was designed and developed with the assumption of inelastic demand, which excluded the active participation by consumers.Advances in communication and control technologies have enabled cost-effective demand response and distributed energy resources, introducing elasticity at the distribution level and expanding the space of possible market coordination mechanisms. High penetration of distributed energy resources and emerging microgrids create new coordination challenges for Distribution System Operators (DSO) and vertically integrated utilities performing DSO-like functions. Retail energy markets are increasingly proposed to coordinate distributed energy resource behavior, align economic incentives, and manage local constraints, but many evaluations still treat market clearing, feeder constraints, and operational timing as separate problems. This dissertation adopts a co-simulation perspective to evaluate how market designs behave when these components interact under realistic timing and measurement constraints. This dissertation develops a co-simulation framework for studying retail energy market mechanisms on realistic distribution feeders. The framework integrates distribution simulation, market clearing, and Distributed Energy Resource decision models on a shared time base, and it includes forecasting and measurement imperfections and dispatch tracking limitations that affect whether a mechanism can be executed as designed. Using this framework, the dissertation makes three contributions. First, it documents a feeder modeling and data integration pipeline based on utility models and establishes validation checks used across all studies. Second, it specifies and evaluates a centralized retail market mechanism for coordinating price-responsive communities and battery storage and includes a field demonstration of the end-to-end operation. Third, it extends the same clearing problem to include explicit three-phase linearized distribution optimal power flow constraints and quantifies how network feasibility and locational prices change dispatch and settlements across communities. Across these studies, the co-simulation approach reveals conditions under which modeling separations between clearing and physics, between forecast and realization, and between aggregate feasibility and locational constraints produce conclusions that do not hold under integrated evaluation. These findings clarify which simplifications are benign and which materially change dispatch, price, and settlement outcomes, providing a more complete basis for assessing retail energy market designs before deployment.

On the Co-Simulation of Energy Markets in Distribution Systems

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