Fair electricity transfer price and unit capacity selection for microgrids

Di Zhang, Nouri J. Samsatli, Adam D. Hawkes, Dan J.L. Brett, Nilay Shah and Lazaros G. Papageorgiou

Energy Economics, 2013, vol. 36, issue C, 581-593

Abstract: Microgrids are defined as an area of electricity distribution network that can operate autonomously from the rest of the network. In order to achieve the best economic outcomes, the participants in a microgrid can benefit from cooperation in microgrid design and operation. In this paper, a mathematical programming formulation is presented for fair, optimised cost distribution amongst participants in a general microgrid. The proposed formulation is based on the Game-theory Nash bargaining solution approach for finding optimal multi-partner cost levels subject to given upper bounds on the equivalent annual costs. The microgrid planning problem concerning the fair electricity transfer price and unit capacity selection is first formulated as a mixed integer non-linear programming model. Then, a separable programming approach is applied to reform the resulting mixed integer non-linear programming model to a mixed integer linear programming form. The model is applied to a case study with a microgrid involving five participants.

Keywords: Microgrid; Electricity transfer pricing; Game theory; Mixed integer optimisation (search for similar items in EconPapers)
JEL-codes: C54 C61 C71 Q41 Q43 Q51 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:36:y:2013:i:c:p:581-593

DOI: 10.1016/j.eneco.2012.11.005

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