An Interval-based privacy – Aware optimization framework for electricity price setting in isolated microgrid clusters

Abstract

With the advance of communication infrastructures and the necessity of increasing the efficiency of energy systems, electricity networks are evolved towards more decentralized architectures and operational schemes. In this context, microgrid clusters are emerging as a valuable framework for optimal integrating renewable sources, demand response initiatives, and storage systems. When the cluster is competitive, the different agents partaking in the cluster compete for trading energy with others, for which an upstream agent (coordinator) sets nodal prices in a similar way to conventional energy markets. This paper is focused on this aspect by developing a novel price setting mechanism for islanded microgrid clusters based on an original equilibrium problem with an equilibrium constraints structure. The new proposal concerns about privacy issues, for which an original diagonalization algorithm is proposed by which only boundary information is transferred from microgrids to the coordinator. Moreover, uncertainties from renewable generation and demand are accommodated using interval notation and equivalent scenarios. The overall problem is raised as a bi-level model, which is further linearized and transformed into a single-level framework tractable by off-the-shelf solvers. A 4-microgrid cluster integrated into a 9-bus network serves as an illustrative case study. The impact of uncertainties is profusely studied, showing that total energy exchanged among microgrids can decrease by 61 % when the influence of uncertain parameters is notable. Other relevant aspects are discussed, and the practicability of the new proposal is demonstrated by analysing its computational performance. Moreover, the developed tool is further validated on a medium-scale network involving a large number of microgrids.