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This paper presents a market-based optimization framework wherein Aggregatorscan compete for nodal capacity across a distribution feeder and guarantee thatallocated flexible capacity cannot cause overloads or congestion. Thismechanism, thus, allows Aggregators with allocated capacity to pursue a numberof services at the whole-sale market level to maximize revenue of flexibleresources. Based on Aggregator bids of capacity (MW) and network access price($/MW), the distribution system operator (DSO) formulates an optimizationproblem that prioritizes capacity to the different Aggregators across thenetwork while implicitly considering AC network constraints. This grid-awareallocation is obtained by incorporating a convex inner approximation into theoptimization framework that prioritizes hosting capacity to differentAggregators. We adapt concepts from transmission-level capacity marketclearing, utility demand charges, and Internet-like bandwidth allocation rulesto distribution system operations by incorporating nodal voltage andtransformer constraints into the optimization framework. Simulation basedresults on IEEE distribution networks showcase the effectiveness of theapproach.

Market mechanism to enable grid-aware dispatch of Aggregators in radial distribution networks