The Impact of Energy Storage on Micro-grid: A Multi-Agent Game Theory Approach

It is difficult to balance the power between demand and generation in electrical networks with the rise of distributed energy resources (DERs), especially for the uncertainty of renewable generation. Smart grid concepts have been developed to solve this problem. A set of distributed generation, demand flexibility and energy storage devices are locally managed to minimize the local total generation cost. However, impacts of energy storage on micro-grid has not been explored yet. In this paper, a local smart market based on a multi-agent system is presented to provide for the quantitative evidence of the beneficial impact of flexibility enabled by demand flexibility and energy storage in limiting market power by distributed generation (DG) units. Quantitative analysis is proposed by a bi-level optimization model of the micro-grid setting, accounting for the operational constraints of energy storage. This bi-level problem is solved after converting it into a Mathematical Program with Equilibrium Constraints (MPEC) and linearizing the latter through suitable techniques. Case studies demonstrate the effectiveness of the proposed method.