A Review on Coordination Schemes Between Local and Central Electricity Markets

A Local electricity market (LEM) is a market place for trading the electricity produced and consumed locally while ensuring the security constraints of the distribution grid. Moreover, LEM acts as a mediator for participation of distributed local resources into the central electricity market (CEM) by facilitating the communication to CEM. However, effective utilization of local resources in the system necessitates effective coordination between the LEM operator (e.g., DSO) and the CEM operator (e.g., TSO) because these resources can potentially be used both locally and system-wide. In this paper, we review different coordination schemes in this regard. Coordination schemes are categorized as DSO leader, DSO follower and TSO-DSO iteration. Independent local market design with no coordination is also reviewed.