A novel community‐based local electricity market for multiple communities with joint energy trading considering the risk of participation

Abstract

AbstractGrowing penetration of distributed energy resources (DER) leads to emerging changes and issues in future power systems. A system oprator aims to maximise demnad side energy trading while minimising energy improts from upstream grid. This paper proposes a reliable local energy market (LEM) trading mechanism in which consumers and prosumers can trade self‐produced energy in a multiple community‐based market (MCBM) framework to optimally provide the balance. The proposed framework intends to maximise social welfare by fair allocation of resources, increasing the provided reserve for the main grid, and shaving the peak power resulting in enhancement of network flexibility. The overall model is formulated in the style of a bi‐level problem in which the lower‐level clears the market and the upper‐level is designated to redistribute the costs and benefits among market participants. Furthemore, the conditional value at risk (CVaR) approach is employed to evaluate how risk affects social welfare. Moreover, the impact of multiple communities and joint energy trading on the outcomes of the market is examined. The proposed model has been evaluated by analysing IEEE 33‐bus standard test system, and numerical studies verify the effectiveness of the proposed approach.