The Non-Cooperative Bilateral Trading Among DG Owners Considering both Investment and Operation Stages

With the increasing penetration of distributed renewable generation, the distribution system has witnessed significant development, including the emergence of new market participants and transaction schemes. Bilateral trading offers a platform for distributed generation owners to share self-generated energy and generate profits, thereby encouraging investments in distributed generation resources. This paper proposes a non-cooperative bilateral trading mechanism among DG owners considering both investment and operation stages. Based on the investment and operation models and market trading models, we demonstrate the importance of promoting individual profit as a non-cooperative game rather than focusing on social welfare as a cooperative game, particularly in the context of small-scale distributed energy systems with DG owners. The case studies verify that the proposed non-cooperative bilateral trading mechanism can encourage DG owners to increase their investment in distributed generation resources while maintain their costs at an acceptable level when compared to the cooperative case.