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Establishing a hierarchical local market structure using multi-cut Benders decomposition

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  • Zhang, Haoyang
  • Zhan, Sen
  • Kok, Koen
  • Paterakis, Nikolaos G.

Abstract

Local electricity markets (LEMs) such as peer-to-peer (P2P) and community-based markets allow prosumers and consumers to exchange electricity products and services locally. In order to coordinate electricity trading and flexibility services, this paper proposes a hierarchical prosumer-centric market framework with a hybrid LEM and a local flexibility market (LFM). Multi-cut Benders decomposition (MCBD) is employed to decompose the integrated hybrid LEM into a centralized P2P market and multiple community-based markets. The aggregators coordinate energy sources and demands of households in low voltage (LV) distribution networks (DN) as virtual power plants (VPPs) and engage in trading through a P2P market over the medium voltage (MV) DN. In addition, a modified MCBD (M-MCBD) approach is proposed to accelerate the convergence process. The LFM is operated by the distribution system operator (DSO) and is formulated as a mixed-integer nonlinear programming (MINLP) problem which is further relaxed to a mixed-integer second-order cone programming (MI-SOCP) problem. The case study demonstrates that aggregators were able to collaborate on trading within the hybrid LEM to minimize the costs incurred by prosumers within the network. Furthermore, the proposed M-MCBD method improves the scalability of the MCBD by enhancing its convergence speed and accuracy, as demonstrated by testing on problems of varying scales.

Suggested Citation

  • Zhang, Haoyang & Zhan, Sen & Kok, Koen & Paterakis, Nikolaos G., 2024. "Establishing a hierarchical local market structure using multi-cut Benders decomposition," Applied Energy, Elsevier, vol. 363(C).
    • Handle: RePEc:eee:appene:v:363:y:2024:i:c:s0306261924004562
    DOI: 10.1016/j.apenergy.2024.123073
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    References listed on IDEAS

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