Distribution company and microgrids behaviour in energy and reserve equilibirum

In this paper, the cooperation of distribution company (Disco) and microgrids (MGs) in a local energy and reserve markets is addressed. To investigate the behavior of these decision makers in local energy and reserve equilibrium, a bilevel optimization model is presented. In the proposed bi-level model, Disco and MGs are considered as the leader and the followers, respectively. Disco decides about energy and reserve price in local markets. In addition, MGs decides about optimal scheduling of their resources and energy and reserve interactions with Disco in local markets. In energy and reserve equilibrium point, the local energy and reserve prices and the amount of energy and reserve interactions between Disco and MGs are determined. Duality theory is employed to solve the proposed bi-level model. The proposed model has been applied on a distribution grid with four MGs and the numerical results demonstrate the effectiveness of the proposed modeling framework.