A Flow-based Distributed Trading Mechanism in Regional Electricity Market with Energy Hub

The concept of the energy hub (EH) has been emerged to accommodate renewable energy sources in a multi-energy system to deploy the synergies between electricity and other energy sources. However, the market mechanisms for integration of the EHs into the energy markets are not sufficiently elaborated. This paper proposes a flow-based distributed trading mechanism in the regional electricity market (REM) with EH. The regional system operator (RSO) coordinates the net transactions of the regional transmission system in two markets, i.e., a REM market integrated with an EH and the wholesale electricity market of the upstream grid. As an independent stakeholder, each nodal agent uses price disparity to achieve cross-arbitrage from both markets. The EH is a third player intending to maximize his profit from trading in the REM and the wholesale natural gas market. We develop a distributed algorithm based on the alternating direction method of multipliers (ADMM) to obtain the equilibrium solution. The DC power flow is decomposed into optimization problems for the RSO and the agents at different nodes, which can be solved in a distributed manner to achieve the global optimality without violating the privacy of agents. A case study based on a realistic regional transmission system verifies the effectiveness of the proposed mechanism and shows that the mechanism is effective in the decomposition of power flow and the increment of energy efficiency.