Strategic bidding optimization of microgrids in electricity distribution market

Future distribution network is expected to be a combination of multiple microgrids. Under the environment of power market reformation in the retail side, microgrids are foreseeable to be the emerging players to participate in the competition of the market. Therefore, there is an urgent need to explore the transaction and bidding mechanism of electricity distribution market with microgrids. In this paper, the strategic bidding optimization of microgrids is formulated as a bi-level programming problem. The path following interior point algorithm and genetic algorithm are utilized to solve the lower level market clearing of the distribution system operator subproblem and the upper level profits maximization of each microgrid operator subproblem, respectively. The Nash Equilibrium of the market is achieved based on dynamic game under complete information. A suite of case studies on the IEEE 33-bus system are conducted to evaluate and validate the proposed method.