Mitigating Increase-Decrease Gaming with Alternative Connection Agreements: A Defender-Attacker-Defender Game

Redispatch markets are widely used by system operators to manage network congestion. A well-known drawback, however, is that Flexibility Service Providers (FSPs) may strategically adjust their baselines in anticipation of redispatch actions, thereby aggravating congestion and raising system costs. To address this increase-decrease gaming, Distribution System Operators (DSOs) could use Alternative Connection Agreements (ACAs) to conditionally limit the available connection capacity of market participants in the day-ahead stage. In this paper, we present a novel Defender-Attacker-Defender game to investigate the potential of this approach in distribution networks under load and price uncertainty. We solve the resulting trilevel optimization model using a custom branch-and-bound algorithm, and we demonstrate that it efficiently solves the problem without exploring many nodes in the branch-and-bound search tree for most simulated scenarios. The case study demonstrates that applying ACAs can substantially lower redispatch costs (e.g. by 25%) for the DSO with only a limited impact on FSP profits. The effectiveness of the approach critically depends on how often the DSO can invoke ACAs and on the extent to which the DSO can anticipate strategic bidding behavior of the FSP.