Modern active distribution grids are characterized by the increasing penetration of distributed energy resources (DERs). The proper coordination and scheduling of a large numbers of these small-scale and spatially distributed DERs can only be achieved at the nexus of new technological approaches and policies. As such, this paper presents a distributed optimal power flow formulation for the distribution grid, applied to the problem of Volt-VAR optimization (VVO). First, we propose a convex model to describe the power physics of distribution grids of meshed topology and unbalanced structure, based on current injection and McCormick Envelopes. Second, we employ the distributed proximal atomic coordination (PAC) algorithm, which has several advantages over other distributed algorithms, including reduced local computational effort and improved privacy. We implement VVO by optimally coordinating DERs including PV smart inverters and demand response. Results from the IEEE-34 bus network are presented, under different DER penetration scenarios and using different VVO objective functions. Our results show the need for DER coordination to achieve desired grid performance. Finally, we discuss the extension of such an optimal power flow formulation to the development of market derivatives to provide financial compensation to DERs providing grid services such as reactive power support and voltage support, within a local retail market framework.
Keywords smart grids, renewable energy integration, optimal power flow, distributed computation