Modeling Local Energy Market for Energy Management of Multi-Microgrids

The diffusion of distributed energy resources (DERs) has changed the supply-demand balance of power systems. One option to modernize the management of the electricity distribution is to operate the distribution system with interconnected micro-grids (MGs). However, the MG participation in wholesale energy and ancillary service markets creates several challenges in the interactions among the energy market managing entities. To solve these problems, local energy markets (LEMs) have been proposed, where the MGs can trade energy with each other under the management of the LEM manager (LEMM) to minimize their operation cost. In this paper, a local energy market is modeled for multi-MGs (MMGs) to minimize the operation cost of MGs individually and their social welfare in cooperation with each other. In such model, the optimal scheduling of the DERs in each MG is done through the market clearing process. To investigate the effectiveness of the proposed approach, the local energy market is applied to a distribution network with three MGs.