Equilibrium Analysis of Multi‐Energy Markets with Microgrids Bidding

Abstract

As an effective way to accommodate the distributed renewable energy, microgrid participating in the electricity market competition is an inevitable trend. Because of severe uncertainty and poor dispatchability of the distributed renewable energy in the microgrid, how to counterbalance the deviation between microgrid's actual output/demand and cleared quantity from the market is an important issue needed to address. First, a multi‐energy trading framework is introduced where microgrids bid in a distribution electricity market (DEM). An arbitrageur is presented to buy and sell electricity between the DEM and the day‐ahead wholesale market (DAWM). In order to compensate the bid deviations of microgrids with uncertain output/demand in the DEM, the power to gas (P2G) technologies are applied by a microgrid when it has excess electricity, while the natural gas generating unit (NGGU) is applied when it has deficit electricity. Second, based on the multi‐energy trading framework, a joint stochastic equilibrium model for the DEM, DAWM, and the gas market (GM) is proposed. In addition, Monte Carlo simulation and scenario reduction techniques are applied to tackle the uncertainty in the actual output/demand of microgrids. Finally, the numerical examples show that the proposed multi‐energy trading model can compensate the deviation of the microgrids with uncertain output/demand in the DEM, and help to improve the market competitiveness of microgrids and the utilization of distributed renewable energy. © 2020 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.