Transactive energy management for microgrids considering techno‐economic perspectives of utility – a review

Abstract

In a power system, distributed energy resources, including renewables, are advantageous for reducing power transmission losses and environmental pollution. However, increasing penetration of distributed renewable energy sources is challenging as they may pose security issues to the grid and centralized control of quantum number of such sources is quite impossible. Microgrid based distribution system is facilitating integration of distributed renewable energy sources as they can supply the local loads and reduce burden on the grid. Moreover, distributed control mechanism of different microgrids enhances the functioning efficiency of the grid. However, intermittent and uncertain nature of renewables leads into demand-supply imbalance in a microgrid. Networked microgrids is new concept where the energy sharing between the microgrids may encourage renewable integration and reduce demand-supply imbalance. In order to manage such energy sharing among the different components in a microgrid or different microgrids in a networked structure, an appropriate energy management approach is necessitated. Transactive energy is an emerging technology for energy management in the distribution system, which uses market mechanisms for energy management. This paper discusses various types of market structures and market clearing approaches in transactive energy framework for energy management. Moreover, techno-economic perspectives of utility in transactive energy trading, such as network constraints and network usage charges, are elaborated. Finally, this review details the challenges and future scope in the transactive energy management of microgrids and networked microgrids.