Bilateral negotiation of energy Contracts in Microgrids

Electric transactions are a fundamental issue in microgrids, especially during islanded mode operation with no support from the main grid. The two main aims of electricity markets are ensuring a secure and efficient operation and decreasing the cost of energy. To achieve these aims, two main market models have been considered: pools, bilateral contract. Pool price tend to change quickly and variations are usually highly unpredictable. Hence, market participants can enter into bilateral contracts to hedge against the pool price volatility. Few studies on the modeling of bilateral market in microgrid, especially with respect to the uncertainty of market have been carried out. The goal is to obtain a sustainable structure using the values given by the load and distributed generators (DG), and show that, given the market risk, social welfare is affected. The proposed model describes a case study on forward bilateral contract using a five-bus test systems.