Dynamic energy trading scheme for future smart grid

Abstract

This thesis proposes dynamic energy trading mechanism in microgrids for future smart grid. First, it designs a contribution based energy trading mechanism among micro-grids in a competitive market. In each fixed time interval, each micro-grid can be an energy provider or a consumer according to their energy generation and local demand. Under the trading mechanism, there is a distributor which gathers the surplus energy from providers and distributes it to the consumers based on the consumers’ historical contribution level. To design the trading mechanism, a novel contribution based energy allocation policy is proposed. Each consumer which knows this distribution rule decides the amount of requesting energy in order to maximize its utility

that is, the quantity of energy it will receive. Finally, the economic benefits of such trading mechanism are studied by analyzing the decision making procedures of consumers and distributor. The problem is formulated as a non-cooperative energy competition game among the consumers. The existence and the uniqueness of Nash Equilibrium (NE) are shown, and the NE solution is given as a closed-form. Also, even though there are foolish consumers which do not take the given NE solution, a consumer which takes the NE solution will not lose out on its utility. The proposed energy trading mechanism is stable enough to be applied to a practical micro-grid trading market. Next, it presents the design of an demand-driven energy trading system among microgrids. Each microgrid can be either a provider or a consumer depending on the status of its energy generation and local demands. Under this approach, an aperiodic market model is newly proposed such that trading occurs when one of the consumers requests energy from the trading market. To promote the trading system, a consumer-side reward concept is introduced. The consumer makes a decision on the size of the posted reward to procure energy depending on its required energy level. Providers then react to this posted reward by submitting their energy bid. Accordingly, the posted reward is allocated to the providers in proportion to their energy bids. Moreover, for practical concerns, a transmission and distribution loss factor is considered as a heterogeneous energy trading system. The problem is then formulated as a non-cooperative Stackelberg game model. The existence and uniqueness of Stackelberg equilibrium (SE) are shown and the closed-form of the SE is derived. Using the SE, an optimal trading algorithm for microgrids is provided. The stability of the energy trading system is verified due to the unique SE. In this approach, periodical information or expected waiting time for trading is required for sustaining an energy trading market. Additionally, it proposes a new metric ’energy independence’ of island, to evaluate the energy trading mechanism. The energy trading mechanism proposed in other studies and the energy trading mechanism proposed in this paper are compared based on the proposed metric. Unlike the conventional method, we consider the temporal flow of the simulation and use various prediction algorithms and actual measurement values that should be considered accordingly. Simulation comparisons show that the proposed demand-driven energy trading algorithm is superior in terms of energy independence. This simulation will not only provide a basis for evaluating energy trading algorithms in the future, but will also provide a methodology for comparing energy trading algorithms.