Optimal Operations of Local Energy Market With Electric Vehicle Charging and Incentives for Local Grid Services

The development of a local energy market (LEM) in Thailand involves prosumers and electric vehicle (EV) owners in a low-voltage distribution system (LVDS). However, both maximizing social welfare through independent energy transactions and managing distribution network constraints (DNCs) remain challenging. Additionally, defining fair incentives and ensuring equitable participation in local grid service programs further add to these challenges. This paper proposes an optimal LEM operation incorporating participants’ selection of energy transaction partners and independent price negotiations to maximize social welfare. The distribution system operator provides grid service programs to address violations, define fair incentives, ensure equitable participation, and guarantee the resolution of DNC violations while participants maintain control over their power consumption. A novel penalty scheme is proposed to support these grid service programs. Numerical simulations on a 380-V LVDS in Thailand demonstrate that social welfare is maximized at 19.17 THB/h across all preference cases during the study period. The LEM trades electricity without violating DNCs while allowing self-management. Results show that EVs contribute 83.66% of the demand reduction required by the distribution system operator, while the penalty scheme discourages 100% of individual benefit pursuit. Revenue compensation covers 100% of all prosumers’ revenue before implementing the grid service programs for all periods.