Formulation of pricing mechanism for Microgrid energy

Interconnection of various low voltages, small-scale distributed generators (DGs), energy storage devices and controllable loads interfaced through fast acting power electronic devices in an isolated remote area form a microgrid as islanding operation where conventional grid is not available. Combined heat and power (CHP) produced by DGs may be utilized in the local market making the Micro grid most efficient and economic. Like deregulation regime in conventional power market, multi agent generator providers also may be considered to make the Microgrid market equal competitive. The basic objective of a competitive electricity market is to serve the consumers at a reduced price. The objective of this paper is to analyze and propose the pricing mechanism for Microgrid energy in the competitive electricity market where the Microgrid Central controller (mucc) is made to participate in the bidding process to finalise pricing mechanism. Two important market settlement techniques, Day-ahead and Real-time, have been considered with the marketing strategies of renewable DGs like Photovoltaic (PV) and wind generation introduction.