Flexibility Pricing in Distribution Systems: A Direct Method Aligned with Flexibility Models

Effective quantification of costs and values of distributed energy resources (DERs) can enhance the power system's utilization of their flexibility. This paper studies the flexibility pricing of DERs in distribution systems. We first propose a flexibility cost formulation based on adjustment ranges in both power and accumulated energy consumption. Compared with traditional power range-based approaches, the proposed method can quantify the potential inconvenience caused to DER users by flexibility activation and directly capture the time-dependent characteristics of DER's flexibility regions. We then propose a flexibility cost formulation aligned with the aggregated flexibility model and design a DSO flexibility market model to activate the aggregated flexibility in the distribution system to participate in the transmission system operation for energy arbitrage and ancillary services provision. Furthermore, we propose the concept of marginal flexibility price for the settlement of the DSO flexibility market, ensuring incentive compatibility, revenue adequacy, and a non-profit distribution system operator. Numerical tests on the IEEE 33-node distribution system verify the proposed methods.