Decentralized network congestion management: Discussing the incentives towards the TSO-DSO coordination


Will a network operator incentive promoting congestion cost minimization lead to a minimal system congestion cost? In this contribution, we argue that this is not always the case. Network operators can increase the social congestion cost when minimizing their own costs. The difference between the optimal solution of the network operator and the social one results from the spill-over effects of the network congestion management on other voltage levels and network regions. There is a need to implement sophisticated design for flexibility procurement in order to account for such effects and to provide an incentive towards a coordinated flexibility use.