Abstract
Microgrid is an effective way to accommodate distributed renewable energy, and there is a need for microgrids to participate in electricity market competition to ensure its sustainable development. For this purpose, a market trading framework is presented where microgrids sell electricity by submitting bids in the distribution electricity market (DEM) while generators compete by submitting bids in the day-ahead wholesale market (DAWM). The retailers are considered to submit bids in the two markets to buy electricity to meet the demand of customers and an arbitrageur is introduced to buy and sell electricity between the DEM and the DAWM. Based on the market framework, a joint equilibrium model for the DEM and the DAWM is proposed. Moreover, the equilibrium problem is converted into a convex optimization problem, and the existence and uniqueness of Nash equilibrium for the DWAM and the DEM is theoretically demonstrated. Due to information asymmetry in practice, a distributed algorithm is applied to find equilibrium outcomes. Finally, numerical examples are presented to verify the effectiveness of the proposed model and algorithm.
Highlights
Microgrids are small-scale power systems that can distribute energy in small geographic areas flexibly and reliably
Considering the interaction between the day-ahead wholesale market (DAWM) and the distribution electricity market (DEM) caused by the arbitrageur, the equilibrium of the two markets needs to be found by solving a joint equilibrium model, which is formed by combining the equilibrium problems of the two markets
This paper addresses the need for microgrids to participate in electricity market competition
Summary
Microgrids are small-scale power systems that can distribute energy in small geographic areas flexibly and reliably. Reference [6] proposes a hierarchical structure for the electricity market based on dynamic game, where the generation companies bid in the DAWM and the microgrids bid in a distribution market. The main contributions of this paper can be listed as follows: 1) A market trading framework is presented in which microgrids sell electricity by submitting bids in the form of FIGURE 1. An arbitrageur is allowed to participate in the DEM and the DAWM by buying electricity from the lowerprice market and selling to the higher-price market Based on this market framework, a joint equilibrium model of the DAWM and the DEM is proposed and the interactions between the two markets are studied. QiIn represents the quantity of electricity bought from the DAWM by the arbitrageur
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