Distributed Online Incentive Scheme for Energy Trading in Multi-Microgrid Systems

Abstract

Microgrids (MGs) are essential components of a smart grid, and they play an important role in assisting smart grid operation. Furthermore, multi-MG systems, which can further improve smart grid operation, raise significant challenges in terms of management and interoperation because of their increased complexity. To address this, we propose a multi-bid online incentive scheme for energy trading in multi-MG systems, in which MGs act as buyers and sellers to trade surplus energy. In the proposed system, buyer MGs can submit multiple bids to different sellers, and the distributed MG system operator matches buyer and seller MGs in a way that maximizes the utility of buyers. Theoretical analysis demonstrates that the proposed method meets the properties of incentive compatibility and individual rationality. Moreover, through detailed performance evaluation, the proposed scheme was capable of achieving better performance in comparison with existing schemes regarding utility, energy purchasing cost, and buyer MG’s satisfaction ratio. Our experimental results also demonstrated that the proposed scheme could shift the system peak-load, improving the robustness of the multi-MG system. <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Note to Practitioners</i> —In this article, we addressed the energy trading issues in multi-microgrid (MG) system, and proposed a distributed incentive mechanism to achieve more flexible and efficient energy allocation. Most existing works on energy trading use centralized methods, which means all electrical users will submit only one bid to the platform, and finally the platform decides to match the trading parties. This will lead to users unable to actively choose trading partners, thus reducing the volume of the whole market. To this end, in this paper, we proposed a distributed incentive mechanism for the multiple microgrid system, in which the buyer microgrids are able to submit multiple bids to different sellers. Moreover, each seller microgrids act as a distributed energy market, and the distributed MG system operator matches the buyers and sellers which aims to maximize the utility of buyers. The proposed scheme is helpful in managing the energy trading among the multi-MG system and can be readily implemented in the real-world large-scale electricity trading market.