This article has been accepted for publication in a future issue of this journal, but has not been

fully edited. Content may change prior to final publication. Citation information: DOI 10.1109/TPWRS.2017.2691558, IEEE
Transactions on Power Systems

Distribution Optimal Power Flow with

Real-time Price Elasticity
Wei Wei Member, IEEE, Jianhui Wang, Senior Member, IEEE, and Lei Wu, Senior Member, IEEE

Abstract—This letter investigates a new class of optimal power equation; (4) defines the apparent power flow injection at the
flow problem for distribution systems, where elastic loads respond head node of each line. Load pdj = pd0 dr
j + pj consists of a
to real-time nodal prices by adjusting their demands. A fixed- d0
fixed part pj and a price-sensitive part
point iteration algorithm is suggested to identify an equilibrium.
A concise criterion is devised to judge convergence.  dr

 pjm , if λj < λnj ;


Index Terms—distribution network, demand response, loca- λj − λj dr
n
jm − m
pdr n (pjm − pjn ), if λj ∈ [λj , λj ] (5)
dr n m
tional marginal price, optimal power flow pdr
j =

 λ − λ

 dr
j j

I. P ROBLEM D ESCRIPTION pjn , if λj > λmj ;

EMAND response (DR) programs offer consumers finan- where λnj and λm dr dr

D cial incentives to reduce or shift their demands during

peak hours. Real-time pricing is an effective policy in DR
j are threshold prices, pjn and pjm are min-
imal and maximal values of the elastic part. Other continuous
nonlinear functions, such as those investigated in [1], can be
practices, as it carries instantaneous information on system used in (5) as well. Operating boundary constraints include:
operation. In the presence of DR, generation and consumption
become interactive. Stability of a uniform marginal pricing pgn g gm gn g gm
j ≤ pj ≤ pj , qj ≤ qj ≤ qj , Uj ≤ Uj ≤ Uj , ∀j (6)
n m

market with an aggregated elastic load is studied in [1], in Pijl ≥ 0, Qlij ≥ 0, (Pijl )2 + (Qlij )2 ≤ (Sl )2 , ∀l (7)
which generator capacity and power balancing condition are
considered in market clearing. This letter extends the problem where (6) limits generation capacity and voltage magnitude at
to a locational marginal price (LMP) based distribution market each bus, (7) restricts power flow in each distribution line.
with nodal demand elasticity. The market is cleared according The DOPF problem is formulated as
to the distribution optimal power flow (DOPF), which explic-
itly accounts for line loss and its impact on LMPs. The branch min{F | s.t. Cons-PF(λ), Cons-BD} (8)
power flow model of a radial network can be expressed as [2] where Cons-PF(λ) = {(1)−(5)} with LMP variable λ = [λi ],
∑
Pijl + pgj − rij
l l
Iij = l
Pjk + pdj : λj ∀j ∈ B (1) ∀i, Cons-BD = {(6), (7)}. The objective function is given by
∑[ ] ∑
k∈π(j)
F = ai (pgi )2 + bi pgi + ρ l
P0j (9)
∑
Qlij + qjg − xlij Iij
l
= Qljk + qjd , ∀j ∈ B (2) i∈B j∈π(0)

k∈π(j)
Uj = Ui − l
2(rij Pijl + xlij Qlij ) + l 2 l
(zij ) Iij ,
l
Iij Ui = (Pijl )2 + (Qlij )2 , ∀l ∈ L
where B is the set of nodes except the slack bus; L is the set
of lines; (l, i, j) denotes line l ∈ L with its head bus i ∈ B and
tail bus j ∈ B; π(j) stands for the set of child buses of bus j;
pgj , pdj (qjg , qjd ) are active (reactive) generation and load at bus
j; rijl
, xlij , and zij l
are resistance, reactance, and impedance
l l
of line l; Pij , Qij , and Iij l
are active power, reactive power,
and square magnitude of current flowing through line l; Uj
is square voltage magnitude at bus j. (1) and (2) are nodal
power balancing conditions, and the dual variable λj of (1)
gives LMP at bus j; (3) represents the forward voltage drop
W. Wei is with the Department of Electrical Engineering, Tsinghua Uni-
versity, 100084, Beijing, China. (e-mail: wei-wei04@mails.tsinghua.edu.cn).
J. Wang is with the Department of Electrical Engineering at Southern
Methodist University, Dallas, TX 75275 USA and the Energy Systems
Division at Argonne National Laboratory, Argonne, IL 60439 USA (email:
jianhui.wang@ieee.org)
L. Wu is with the Department of Electrical and Computer Engineering,
Clarkson University, Potsdam, NY, 13699, USA (e-mail: lwu@clarkson.edu).
where ai and bi are cost coefficients, the first term is the total
l
production cost of local units; P0j means the power delivered
∀j ∈ B (3)
from the slack bus through line l, so the second term is an
(4) energy transaction cost with the main grid at a fixed price ρ.
II. P ROPOSED M ETHOD
Different from traditional OPF problems, responsive loads
in (5) depend on the dual variable λ at optimum, constituting
a close-loop feedback. A fixed-point iterative procedure for
DOPF problem (8) with demand elasticity is given in Algo-
rithm 1. Additional discussions are provided as follows.
1. Solving OPF problem
We perform convex relaxation to branch flow equality (4)
by replacing “=” with “≥”, and arrange it into a canonical
second-order cone form. This relaxation is shown to be exact
for radial networks under mild conditions [3]. In this way,
problem (8) with fixed demands gives rise to a second-order
cone program, which can be efficiently solved, and LMPs can
be extracted from dual variables associated with active power
balancing equality (1) at the optimal solution.
2. Convergence guarantee

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This article has been accepted for publication in a future issue of this journal, but has not been fully edited. Content may change prior to final publication. Citation information: DOI 10.1109/TPWRS.2017.2691558, IEEE
Transactions on Power Systems

Algorithm 1 : Fixed-point iteration TABLE I

1: Choose ε > 0, and a maximal number of iterations Kit M
. C OMPUTATION T IME OF D IFFERENT S YSTEMS
d d0 d d0 dr
Set k = 1, demand p (0) = p , p (1) = p + pm . ∆ 0.40 0.50 0.60 0.70 0.80 0.90 1.00
2: Solve problem (8) with fixed pd (k), retrieve LMP λ. Iteration 7 9 12 18 28 59 fail
3: If ∥pd (k) − pd (k − 1)∥2 /∥pdr
m ∥2 ≤ ε, return OPF solution Time (s) 8.47 10.1 13.4 19.3 33.3 83.7 fail
M
and LMP; else if k = Kit , report that the algorithm fails
to converge; else update pdr according to equation (5),
k = k + 1, pd (k) = pd0 + pdr , and go to step 2. the sensitivity |dpdr
j (λj )/dλj | in (11) can be replaced by its
upper bound in [λnj , λm
j ]. Otherwise, certification of (11) with
|dpj (λj )/dλj | evaluated at a given solution provides a local
dr

If the OPF solution with fixed demands satisfies the second-
order sufficient condition, and no active inequality in comple-
mentarity and slackness conditions is degenerate, then LMP is
uniquely determined by a mapping λ = Φ(pdr ). Meanwhile,
equation (5) denotes another mapping pdr = Θ(λ). Therefore,
the elastic demand pdr at an equilibrium state satisfies:
dr dr
p = Θ(Φ(p ))
Because all possible pdr constitutes a hypercube region PD
which is convex and compact, Brouwer fixed-point theorem
[4] says that a fixed point of (10) exists if Θ(Φ(·)) is contin-
uous; moreover, if Θ(Φ(·)) is contractive, Banach contraction
principle ensures that the fixed point is unique and stable [4].
In problem (8), unit production costs are convex quadratic
functions, the uniqueness of LMP can be guaranteed for any
given pdr , and continuity can be expected when PD R
is not too
large. So a solution of (8) with elastic demands exists as long
as power flow is feasible for all pdr ∈ PD R
. The existence of
a solution can be understood from a geometric perspective: at
bus i, λi is increasing in pdr dr
i , while pi is decreasing in λi , so
the supply curve and demand curve must have an intersection.
Given the interactive feature, a solution of (8) is also called a
market equilibrium, which is stable if Θ(Φ(·)) is contractive.
In unstable cases, Algorithm 1 may fail to converge [1]. To
validate a contraction, the spectral radius of sensitivity matrix
J = [∂λi /∂pdr j ], ∀i, j should be less than 1 for all p ∈ PD
dr
However, this condition is difficult to check, because J does
not have a closed-form expression. In fact, even if LMP is not
continuous, a stable solution may still exist.
Here we provide a heuristic but simple criterion to judge the
convergence of Algorithm 1 without continuity and contraction
assumption. Geometrically, the equilibria of (8) is stable if the
sensitivities of supply and demand curves satisfy
stability guarantee for the equilibrium. The proposed frame-
work can be extended to meshed networks by employing a
bus-injection power flow model and a suitable OPF algorithm,
such as the convex relaxation method in [5].
III. C ASE S TUDIES
We present numerical results on a 69-bus test system. Net-
(10)
work data are available at http://shgl.curent.utk.edu/toolsdemo.
R
Generator parameter is identical: pngj = 0, pm gj = 2, qgj = −1,
n
m g 2 g
qgj = 1, the fuel cost function is 200(pj ) +800pj . ρ = 800$/
MWh. Demand elasticity data are given by: pdr n
jn = 0.1, λj =
900$/MWh, λj = 1100$/MWh. In order to validate (12), pdr
m
jm
is parameterized in ∆ ∈ [0, 1] as pdrjm = pdr
jn + ∆(p dr
jM − pdr
jn ),
where pdrjM = (λ m
j − λ n
j )/2a m + p dr
jn . In Algorithm 1, we set
ε = 10−3 , Kit M
= 200. SOCPs are solved by MOSEK solver
on a laptop with Intel i5-3210M CPU and 4 GB memory.
Results with different values of ∆ are provided in Table I.
According to the definition of pdr jm , condition (12) translates
into ∆ < 1. From Table I we can see that the number of
iterations increases with ∆ growing; when ∆ = 1, Algorithm 1
fails to converge in 200 iterations, although we observe that
the value of ∥pdr −pdr0 ∥2 /∥pm ∥2 still decreases slowly. At the
dr
equilibrium with ∆ = 0.90, LMPs at 58 buses still reside in
the interval [900, 1100]$/MWh. Numeric studies on the 246-
bus system, 615-bus system, and 861-bus system whose data
R
.
are provided at the same website convey a similar message:
Algorithm 1 converges faster when ∆ is smaller.
IV. C ONCLUSIONS
DOPF with price elastic demands can be solved by a fixed-
point iteration algorithm. A concise convergence criterion is
suggested, indicating that if nodal prices are insensitive to load
   variations, or demand elasticity is flat, the algorithm converges
 ∂λ (pdr )   dpdr (λ ) 
 i  j j  quickly, and the demand response market is stable enough.
   < 1, ∀i, j ∈ B (11)
 ∂pdr j   dλj 
R EFERENCES
According to (5), if λj ∈ / [λnj , λm
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(12)
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