A Two-Stage Joint Trading Strategy for Electricity and Regulating Capacity in a PV-Rich Local Energy Community

Chang-Sen Feng, Sheng Chen, Hui Huang, Zheng-Mao Li, You-Bing Zhang, Fu-Shuan Wen

Abstract

With the continuing expansion of distributed generation and the increasingly active role of consumers, new forms of decentralized local electricity markets are emerging at the distribution level. However, the inherent uncertainty in photovoltaic (PV) output poses significant challenges to the efficient operation of local energy markets (LEMs), especially in PV-rich energy communities (ECs). To address this system-level coordination problem, this article proposes a novel two-stage framework for joint electricity and regulating capacity trading to maximize social welfare. In the first stage, a distributed optimization scheme jointly coordinates electricity and the available regulating capacity of flexible loads. In the second stage, a generalized noncooperative game model is established to co-price electricity and regulating capacity at the Nash equilibrium, resolving conflicts of interest among market participants. The proposed framework is implemented in a distributed manner using the alternating direction method of multipliers (ADMMs), ensuring both computational efficiency and data privacy. The numerical results demonstrate that, compared with direct transactions with the utility company, the proposed framework increases the net economic benefits of both PV owners and flexible-load consumers.

Source: semanticscholar

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