Decentralized local energy trading with cooperative energy routing in energy local area network

Abstract

Local energy trading is envisioned as a promising energy management approach for distributed renewable energy sources. To efficiently facilitate the novel local energy trading, the concept of energy local area network (e-LAN) has been proposed as an innovative framework for future community power grid, which aims to improve the efficiency of end-to-end power delivery by the novel technique of energy routing. Under this framework, a proper market clearing approach is required for e-LAN to manage decentralized local energy market and coordinate end-to-end energy routing paths. In this paper, a decentralized market clearing approach with cooperative energy routing is proposed for local energy market in e-LAN. Due to the nonconvexity of the original market clearing problem, the proposed approach formulates a new problem for market clearing in e-LAN, which is approximately equivalent to the original problem. The new problem consists of two subproblems, a market clearing problem and a cooperative energy routing problem. For the market clearing problem, this paper proposes a dual decomposition based approach to clear local energy market in a decentralized way so as to avoid privacy violation. The cooperative energy routing problem is solved by proposing a Nash bargaining based approach, where each trading pair can obtain more benefits from cooperation than from noncooperation. Simulation results are presented to verify the effectiveness of the proposed approach in avoiding physical constraint violation, resolving path conflicts and improving social welfare.