A Bi-Level Optimization Approach for Optimal Operation of Distribution Networks with Retailers and Micro-grids

Distributed energy resources (DERs) including distributed generators (DGs) and controllable loads (CLs) are managed in the form of several microgrids (MGs) in active distributions networks (ADNs) to meet the demand locally. On the other hand, some loads of distribution networks (DNs) can be supplied by retailers which participate in wholesale energy markets. Therefore, there are several decision makers in DNs which their cooperation should be modeled for optimal operation of the network. For this purpose, a bi-level optimization approach is proposed in this paper to model the cooperation between retailers and MGs in DNs. In the proposed model, the aim of the upper level (leader) and lower level (follower) problems are to maximize the profit of retailers and to minimize the cost of MGs, respectively. To solve the proposed multi-objective bi-level optimization model, multi-objective Particle Swarm Optimization (MOPSO) algorithm is employed. The effectiveness of the proposed bi-level model and its solution methodology is investigated in the numerical results.