Network-aware energy management for microgrids in distribution market: A leader-followers approach

With the increasing penetration of distributed energy resources (DERs) into distribution systems, microgrids can participate in the market clearing of distribution-level electricity market. This paper proposes a leader-followers -type bi-level model for energy management and market clearing of distribution system with microgrids based on Stackelberg game. Distribution system operator (DSO) is considered as the leader, and microgrid operators (MOs) as followers. In the proposed model, market clearing problem of distribution system is modeled in the upper level, while the energy management problem of microgrids is modeled in the lower level. The distribution locational marginal price (DLMP) is obtained in the upper level model and then transmitted to the lower level model as price signals for microgrids. The model is then reformulated as a Mathematical Program with Equi-librium Constraints (MPEC) problem and the stochastic MPEC model is constructed with the uncertainty of PVs in microgrids. Existence of equilibrium of the proposed single leader multi-follower game is analyzed. Numerical results demonstrate the effectiveness of the proposed model.