Optimal transaction strategies model in energy and reserve markets considering hybrid renewable energy and storage system

The increasing electricity demand and the imperative to reduce CO2 emissions have accelerated the integration of renewable energy sources into power systems. However, the inherently intermittent and non-dispatchable nature of renewable generation poses significant challenges to power system reliability and stability. To address these issues, power systems can be segmented into microgrids (MGs), interconnecting to form multiple MG networks, enhancing control and operational efficiency, and providing a robust solution for addressing power imbalances from forecasting inaccuracies or equipment failures. In such systems, decentralized operation coordinated with dispatch strategies is essential to ensure overall system stability and optimize resource utilization. This approach also helps maintain the economic benefits for all participating entities. This chapter proposes an optimal transaction strategy model for hybrid renewable energy and energy storage systems (ESSs) under multiple MGs in electricity markets. Unlike prior studies focusing solely on energy markets, this framework incorporates both energy and reserve markets to minimize MG operational costs while aligning with current and future policies. Two optimization approaches are explored: a non-cooperative game for individual MG optimization and a cooperative game for coalition-based optimization. Results show significant cost reductions for interconnected MGs, with the cooperative approach achieving lower daily costs and faster computation, proving its practical effectiveness.