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Distributed optimization methods have been extensively applied for the optimization of electric power distribution systems, especially for grid-edge coordination. Existing distributed optimization algorithms applied to power distribution systems require many communication rounds among the distributed agents and may pose convergence challenges in difficult nonlinear settings. The communication network parameters also significantly impact the algorithm's performance. In this paper, we propose a scalable, equivalent network approximation-based, distributed optimization algorithm that employs simulation within optimization using the system's digital twin (DT) to solve the optimal power problems (OPF) for a three-phase unbalanced distribution system. The proposed approach is implemented using a cyber-physical co-simulation platform to validate the robustness of the proposed distributed algorithm under stressed communication. The proposed approach is thoroughly validated using the IEEE 123-bus test system., Comment: 9 pages

The increasing penetration of intermittent renewables, storage devices, and flexible loads is introducing operational challenges in distribution grids. The proper coordination and scheduling of these resources using a distributed approach is warranted, and can only be achieved through local retail markets employing transactive energy schemes. To this end, we propose a distribution-level retail market operated by a Distribution System Operator (DSO), which schedules DERs and determines the real-time distribution-level Locational Marginal Price (d-LPM). The retail market is built using a distributed Proximal Atomic Coordination (PAC) algorithm, which solves the optimal power flow model while accounting for network physics, rendering locationally and temporally varying d-LMPs. A numerical study of the market structure is carried out via simulations of the IEEE-123 node network using data from ISO-NE and Eversource in Massachusetts, US. The market performance is compared to existing retail practices, including demand response (DR) with no-export rules and net metering. The DSO-centric market increases DER utilization, permits continual market participation for DR, lowers electricity rates for customers, and eliminates the subsidies inherent to net metering programs. The resulting lower revenue stream for the DSO highlights the evolving business model of the modern utility, moving from commoditized markets towards performance-based ratemaking.