Retail Market Equilibrium and Interactions among Reconfigurable Networked Microgrids

In this paper, a retail market equilibrium among a set of competing players, i.e., retailers and Microgrids (MGs), considering Dynamic Line Rating (DLR) constraint and demand response (DR) actions is modeled. In this regard, a multi-follower-type bi-level optimization scheduling for decision making of Distribution System Operator (DSO) and reconfigurable networked MGs with inherently conflicting objectives is presented. In this model, the upper-level player of the Main Problem (MP) minimizes the total cost from DSO’s perspective, while in the lower-level of the MP, networked MGs compete with retailers in the retail electricity market as an interior Sub Problem (SP). In the upper-level of the SP the profit of each MG is maximized, where in the lower-level of the SP the social welfare of the retail market clearing process is maximized. Since the resulting bi-level problem is nonlinear and non-convex, it is transformed into a single-level Mixed-Integer Second-Order Cone Programming (MISOCP) problem using Karush–Kuhn–Tucker (KKT) optimality conditions and linearization techniques. The effectiveness of the proposed model is investigated on a real-test system in both grid-connected and islanded modes under different scenarios.