Integration of Flexible Distributed Energy Resource Models into a Market Coupling-based Lagrangian Relaxation of the pan-European Electricity Market

This report presents a method to integrate highly flexible technology models for distributed energy resources such as electric vehicles, power-toheat systems, or home battery systems into a Lagrangian relaxation of the pan-European day-ahead electricity market (EULR). These flexible technology models are highly sensitive to the changes of Lagrangian multipliers within the iterative Lagrangian relaxation process, leading to volatile behavior. Furthermore, they show a high concurrency in their market behavior due to their technical homogeneity. Therefore, the method proposed in this report is an extension of the existing EULR modeling approach to improve the model’s convergence. The methodological extension comprises a convex combination of iteration solutions for the Lagrangian relaxation subproblems similar to Dantzig-Wolfe decomposition. An exemplary case study shows the effectiveness of this extended approach. Keywords— Electricity Market Simulation, Lagrangian Relaxation, Distributed Energy Resources