Grid-aware flexibility aggregation for zonal balancing markets

This paper concerns the aggregation of intra-area flexibility resources into an offer curve towards a multi-area zonal balancing market. The scope for such an aggregation is to convey both the activation cost of the available intra-area flexibility resources and the cost of intra-area transmission constraints to the multi-area zonal market. The method is motivated by the fact that the latter cost component may not be trivial, since congestion also depends on power exchanges originating from/terminating at external control areas as well as on the topology of external control areas. We leverage robust optimization to compute a worst-case upper bound to the intra-area flexibility resource aggregation cost over a plausible domain of external grid operating conditions. We translate this worst-case cost into an ordered collection of price - maximum incremental quantity pairs, at zonal resolution. Our results indicate that such an approach can be used to hedge against the fact that a TSO has no observability outside its control area of responsibility.