A Decentralized Energy Flexibility Trading Framework for Active Distribution Network with Multiple Microgrids

Increasing penetration of wind power generation makes system operators face challenges in balancing supply and demand in real-time. The emerged energy imbalances in distribution networks can be addressed through energy trade with real-time balancing market or making use of flexible behavior of independent units such as flexible loads with ability to shift energy demand in time and small scale distributed generators. To this end, we propose a decentralized energy flexibility trading framework amongst multiple Microgrids (MGs) and Distribution System Operator (DSO) based on Alternating Direction Method of Multipliers (ADMM) to manage unforeseen imbalances in real-time. We show that MG's trading problem is an exact potential game with pure strategy Nash equilibrium. The results demonstrate, participating in the proposed trading mechanism results in considerable cost reduction for MGs in comparison with cases without trading with DSO or trading with real-time balancing market in order to balance energy consumption and generation in real-time.