A hierarchical framework for renewable energy sources consumption promotion among microgrids through two-layer electricity prices

With the increasing penetration of distributed renewable resources (RES) and flexible loads, distribution networks are gradually developing into an active distribution network (ADN), which includes many microgrids (MGs). By considering the network structure, operational targets, and transactional relationship of the ADN, this paper proposes a "physical-transactional" scheme to promote RES consumption through specifically designed price mechanisms. The proposed price forming mechanisms consider the traditional transactions and incorporate the supply-demand ratio into the dynamic price forming process to better suit the highly penetrated renewable energy and small-scale local markets. Through this framework, each player can maximize his/her interest, such as system security, social welfare, the satisfaction of electricity consumption, etc., while renewable energy consumption and sharing can be maximumly promoted. The exponential penalty function-based decomposition and Lyapunov theory-based solution for the multilayer optimization model are employed to solve the inter-layer coordination and individual optimization simultaneously. Finally, a modified IEEE-69 system is taken as an example to verify that the proposed method. Our simulation shows that the proposed framework can promote renewable energy consumption and sharing and improve the social welfare of the ADN.