A Local Market Model for Community Microgrids

This work presents a model of community microgrids, whose members can exchange energy and services among themselves. Pricing of energy exchanges within the community is obtained by designing an internal local market based on the marginal pricing scheme. The market aims at maximizing the social welfare of the community, thanks to the more efficient allocation of resources and the reduction of the peak power to be paid, achieved at an aggregate level. Revenues and costs are redistributed among the members, in such a way that no one is penalized within the community as compared to acting individually. The overall framework is formulated in the form of a bilevel optimization model, where the lower level problem clears the market, while the upper level problem implements the community sharing policy.