*3.3. Criteria*

To conclude whether a market design meets the goals, we need unbiased *criteria* that define the minimum required level for each goal. Criteria assist our design choices by: (1) excluding markets that violate design constraints; (2) suggesting the most promising designs with the help of objectives; and (3) indicating the direction of future improvements. This article does not discuss the full set of criteria but gives two examples. As discussed in Section 3.2, reliability is a key concern of power system operation and is a crucial constraint for DCDS market operation. For instance, a DCDS requires immediate power balancing due to strict converter power limits; a violation of this requirement will either lead to unplanned curtailments or a system-wide voltage collapse. Thus, we propose two quantitative criteria, namely a maximum substation congestion ratio (such as 10%) and a maximum nodal voltage deviation (such as ±30V), to verify different market designs for a DCDS. Such verification demands detailed modelling of a DCDS's power network and market players.

#### **4. Market Architecture Design Variables**

Sections 4 and 5 investigate the design space of DCDS markets, namely a set of design variables and their options. For each variable, we aim to answer: How is the variable defined? What is its role in the overall market design? Which options are there and what does each option imply?

This section identifies the design variables for market architecture—the choice and arrangemen<sup>t</sup> of sub-markets—then lists different options and evaluates their features. Table 2 lists the four design variables on the left, i.e., the choice of sub-markets, their types, the linkages between sub-markets, and the linkage to wholesale markets. The first three are identified by Stoft [27], whereas the fourth one is from our analysis. For each design variable, Table 2 lists the options on the right.


**Table 2.** Electricity market architecture: design variables and their options.

## *4.1. Choice of Sub-Markets*

The choice of sub-markets determines the commodities a market remunerates. It lays the foundation for the incentive scheme. To avoid *missing market* problems [1], a market design should reward all tradeable commodities; a commodity still plays a role even if it is not paid directly [27].

The DCDS operation relies on power dispatch, congestion management, plus various ancillary services regarding voltage regulation, contingency supply, safety, protection and power quality [13]. When deciding which commodities to reward, one should consider non-discriminatory access, completeness (and no repeated remuneration), transaction costs and transparent operation [27]. According to these criteria, (electrical) energy, network capacity (substation capacity in particular) and voltage regulation are qualified for a sub-market [13]. By contrast, the services for contingency supply, safety, protection and power quality have either high entry barriers (technical requirements for instance) or low tradeability (challenging to measure for instance). Therefore, such services should be provided by a distribution system operator (DSO) or regulated by DC network codes. To sum up, energy, network capacity and voltage regulation are the three candidate sub-markets of a DCDS.
