Multi-Microgrids Operation With Interruptible Loads in Local Energy and Reserve Markets

In the evolution of the power systems, a particular case is the presence of a number of microgrids (MGs) operated with mutual interconnection, but without connection to the main distribution system. The interconnected MGs form a structure in which the overall system operation and resource scheduling can be determined by considering centralized or decentralized approaches. This article introduces local energy and reserve markets (LERMs) in which the MG managers (MGMs) can meet their required energy and reserve with optimal scheduling of their resources, besides competing with the other MGs. To model such decision-making framework for MGMs, a bilevel optimization approach is developed in which the MGMs’ problem is modeled as the upper level problem and the LERMs clearing problem is modeled as the lower level problem. This model is transformed into a mathematical programming with equilibrium constraints (MPEC) using the primal-dual transformation. Then, the resulting MPEC for each MG is replaced with its Karush–Kuhn–Tucker conditions, obtaining an equilibrium problem with equilibrium constraints (EPEC) model. The nonlinear terms of the model are linearized through different approaches. Finally, the EPEC model is transformed into a mixed-integer linear problem considering the objective function of all MGMs. The model is applied to a test system with three interconnected MGs. Moreover, the sensitivity of the results to the probability of calling reserve is investigated.