Araceli Hernandez

Alireza Zabihi, Luis Badesa, Araceli Hernandez

The increasing penetration of single-phase loads and distributed generation exacerbates voltage unbalance (VU) in distribution grids, raising concerns about power quality and complicating network operation. However, most market-clearing models and price-based coordination frameworks do not enforce VU limits within a three-phase AC representation, so the implications for grid-code compliance, numerical scalability, and economic signals remain unclear. This paper embeds VU in a three-phase AC optimal power flow market-clearing model and benchmarks two treatments: strict VU limit enforcement and objective function penalization. Building on these insights, an Improved Hybrid Limits (IHL) formulation is proposed that preserves compliance while using a smooth unbalance proxy in the objective to guide the optimization solver. Case studies on a European low-voltage feeder show that IHL maintains feasible operating points, yields price and curtailment signals consistent with conventional hybrid formulations, and converges substantially faster and more reliably than a penalization based on the exact unbalance metric. These results support IHL as a practical and scalable mechanism for VU mitigation in market-based operation of unbalanced distribution systems.

Alireza Zabihi, Luis Badesa, Araceli Hernandez

Finding clear economic signals for distribution-network operation and expansion is increasingly important as single-phase loads and distributed energy resources escalate. These devices create phase-to-phase imbalances that manifest as voltage unbalance, a power quality issue that accelerates insulation aging in machines and increases network losses, thereby raising costs for operators and consumers. Traditional grid codes address unbalance via disparate hard limits on various indices thresholds that differ across standards, offer no dynamic economic incentive and undermine optimality. This paper proposes instead to treat voltage unbalance as a `soft limit' by adding penalty terms to grid operation costs within a three-phase optimal power flow to reflect the cost of the decrease in lifetime of assets due to being subject to voltage unbalance. This unified approach yields dynamic economic signals unbalance-aware Distribution Locational Marginal Prices (DLMP) that reflect the cost of power quality deviations. A novel mathematical decomposition of DLMP is developed, isolating the energy, loss, congestion, and unbalance components. Case studies conducted on two benchmark networks demonstrate the effectiveness and practical value of the proposed method. The results indicate that unbalance penalties reshape nodal prices, produce unexpected phase-level effects, and even allow scenarios where added load reduces unbalance and lowers costs, while providing planners and market designers with actionable insights to balance investment, operation, and power quality in modern distribution systems.