A Novel Incentive Mechanism for CCHP-Based Microgrids in Spinning Reserve

Abstract

To ensure the safe and reliable operation of power system, it is vital to retain some spinning reserve. The increasingly widespread utilization of combined cooling, heating and power (CCHP)-based microgrids (MGs) brings a new way to provide spinning reserve for power system. Therefore, to motivate independent CCHP-based MG operators (CMGOs) to participate in the spinning reserve trading, an incentive mechanism is proposed in this paper. In the mechanism, a distribution system operator (DSO) organizes a number of local CMGOs to participate in the spinning reserve trading and gets spinning reserve from them. A novel index, termed as contribution rate, is proposed to evaluate the participants' contributions to the spinning reserve trading and asymmetric Nash bargaining is adopted to design benefit allocation mechanism. As CMGOs may belong to different economic entities, the centralized solution is not suitable for practical implementation. Distributed solution is proposed to solve the optimization problem through the alternating direction method of multipliers decomposition technique. The simulation results demonstrate the efficacy of the proposed incentive mechanism in achieving benefits for all participants.