A Hierarchical Real-Time Balancing Market Considering Multi-Microgrids With Distributed Sustainable Resources

Abstract

A hierarchical market structure is proposed in this paper for multiple microgrids to participate in transmission-level real-time balancing markets and to provide ancillary services to the utility grid. At the distribution level, local microgrids with distributed sustainable resources, such as demand response, distributed renewables, and energy storage, are economically dispatched by a distribution system operator (DSO). A bi-level optimization model is formulated to guarantee the goals of both DSO and microgrids. It is solved by developing Karush–Kuhn–Tucker conditions and combining the two problems into one mathematical programming with complementarity constraints. Furthermore, since the physical topology and distribution power flow constraints are enclosed to form a non-convex optimal power flow model, a convexification technique is implemented to transform the original problem into a mixed integer quadratic constrained problem for better computation performance. At the transmission level, DSOs strategically bid with generation companies to win the desired share of the market managed by a transmission system operator. A multivariate linear regression is developed to capture the correlation between the bid gained and the prices offered by the DSO and its opponents to maximize its possibility of winning the bid. Simulation studies on IEEE test systems verify the proposed framework.