A cooperative expansion program for Disco and independent microgrids based on a bargaining framework

Abstract

Abstract The emergence of microgrids as independent investors within distribution networks has raised the importance of collaboration between parties in operational or planning programs. The Disco can play a positive role in incentivizing the microgrids to interactively implement their expansion programs. In this regard, this paper proposes a novel cooperative generation and network expansion program, in which the Disco and the microgrids jointly invest in distribution generations to improve their mutual benefits. The Nash bargaining theory is employed to establish a joint optimization problem, so that all participants can improve their goals in an agreement compared to the disagreement case. It is shown that in the case of cooperation, the social welfare objective is maximized and both the Disco and the microgrids benefit from agreement. The investment projects involve planning of distribution generations at each microgrid site and adding/replacing feeders and substations in the network. The nature of uncertainties is addressed by a two-stage stochastic model, so that a scenario tree is defined by the incorporation of the moment matching method. In order to avoid islanded regions within the whole network, a novel mathematical model for network radiality constraint is proposed. Simulations results demonstrate the effectiveness of the proposed framework.