Hybrid Local Electricity Market Designs With Distributed and Hierarchical Structures

With the increasing penetration of distributed energy resources (DERs), prosumers are becoming more active and consumer-centric electricity market designs are needed at the distribution grid level. In order to co-optimize the local energy source management of the prosumers and the energy trading between them, an integrated hybrid local electricity market (LEM), which combines peer-to-peer (P2P) markets and community-based markets, is designed. Moreover, the integrated LEMs are decomposed into two market structures, namely the distributed structure and the hierarchical structure, leveraging the alternating direction method of multipliers (ADMM). In the distributed structure, the integrated hybrid LEM is decomposed into multiple blocks by agents who coordinate a community-based market and negotiate with other agents for the P2P trading. In the hierarchical structure, the integrated hybrid LEM is decomposed into two blocks by markets with a centralized P2P market and several community-based markets. Simulation results suggest that the hierarchical structure converges to the optimal result for both the locally adaptive ADMM (LA-ADMM) and constant penalty factor ADMM with various values. The distributed structure achieves a distributed P2P market, but it only converges with LAADMM and exhibits a substantially higher computational burden than the hierarchical structure due to its multi-block nature.