Modeling the power trading strategies of a retailer with multi-microgrids: a robust bi-level optimization approach

Abstract

ABSTRACT The primary contribution of this paper lies in the development of a bi-level optimization framework designed to model a retailer’s power trading strategies within the context of multi-microgrids. Another noteworthy aspect of this research is managing the risk associated with the retailer’s decision-making process, achieved by addressing the unpredictability of market prices through a robust bi-level structure. In this model, the upper-level problem focuses on the retailer’s decision-making, while the lower-level problem addresses microgrid considerations. Furthermore, a load-shifting strategy is integrated into the microgrid problem to enhance the profitability-to-cost ratio for both the retailer and the microgrids. The results demonstrate a 3% increase in the retailer’s profits and a significant 30% reduction in the microgrids’ costs using the load-shifting strategy. In the most unfavorable scenario, the retailer experiences a profit reduction of 21.67%, while the maximum increase in the microgrids’ costs reaches 238.3%.