A Decentralized Market Framework for Procurement of Operating Reserves From District Energy Systems

District energy system (DES) has become a popular form of supplying comprehensive energy demands in local buildings. For DESs, the operational flexibility can be maintained by energy conversion and storage facilities. Hence, DESs are capable of providing operating reserves to local power systems. This paper addresses the implementation challenges of allowing DES to be deployed alongside conventional generators for providing operating reserves. A two-level hierarchical market framework is proposed which involves a wholesale energy-reserve market for conventional power plants and a subordinate DES operating reserve market. The subordinate operating reserve market determines the quantity and the marginal price of operating reserves provided by DESs. The two markets are linked by the price elastic-quantity provided in the operating reserve demand curve (ORDC) to achieve the stated market coordination. A decentralized decision-making structure is proposed to clear the subordinate operating reserve market considering DES privacy and security requirements. A nested dual-loop solution process is proposed to solve the decentralized optimization problem. A test system is used to illustrate the benefits of the proposed technique in supplying operating reserves through DESs.