**2. Approach**

#### *2.1. Overview*

With the increasing adoption of flexible domestic appliances and small-scale generation technologies like rooftop solar PV, market-based control of the LV network has been drawing extensive research attention in recent years [26–28]. This has principally paved the way for new market actors (e.g., aggregators, energy service companies), novel business models, innovative control algorithms and in general, a more decentralized operation of the future power system [4].

Transactive energy frameworks have been developed to incorporate the flexibility of residential appliances with a range of scopes and aims [29,30]. In this context, market-based mechanisms with local flexibility services have attracted notable interest for ancillary services and network congestion management [6]. However, in a market-coordinated network with a considerable penetration of price-responsive appliances, the overall peak loads tend to be significantly higher due to the higher coincidence of loads in low-price hours. These peak loads may lead to more frequent occurrences of network congestions in the LV networks.

In this work, we aim to incorporate a variable network tariff with the day-ahead dynamic price, as discussed in [6]. The market-based control is coordinated by a commercial market actor such as an aggregator. Aggregators are usually responsible for managing the flexibility in their cluster of end-users and providing the DSO with a schedule of the loading for the following day. Case congestion is expected, and the dynamic price levels are adjusted by varying the network tariff to shift the flexible demand in order to relieve the congestion. Conventional market-based mechanisms try to adjust the day-ahead price based on the network or market issues. These processes need to be carried out by market actors, like aggregators or energy suppliers, who need to be compensated for the provided services and the adjustment in the portfolio. On the contrary, the proposed approach focus on the network tariff part of the price and does not have to depend on the market parties.

The application of such an approach relies on robust and reliable communication among different entities in the whole value chain. An MAS-based system architecture is adopted in this work that provides for an efficient platform for smooth coordination among the involved actors. An overview of the distributed system architecture and related interactions are presented in the following subsection.
