Coordination between smart distribution networks and multi-microgrids considering demand side management: A trilevel framework

Abstract This paper addresses the dilemma of coordination among three kinds of stakeholders, namely, the smart distribution networks, microgrids, and customers with demand response resources under a comprehensive trilevel framework. The interaction among these stakeholders, which are regarded as subjects of individual interest, leads to a complex energy generation, storage, transaction, and consumption problem. Based on the assumption that the customers always provide the best response to the signals of leaders, the trilevel problem is transformed into a bilevel problem by replacing the lowest level problem with its optimality conditions. Next, two coordination schemes are formulated to analyze the interactions between the smart distribution network and microgrids with demand response resources. The first scheme is a full cooperative coordination framework, in which the smart distribution network and microgrids jointly activate the resources located under the distribution networks. The second scheme is an ancillary service framework in the sense that the smart distribution network acts as a service subject to balance the supply and demand of the networks, and charges the management fee for transmission service. This scheme can achieve rapid convergence in a distributed manner, expose little information, and protect the privacy of the selfish participants. For each coordination scheme, a detailed mathematical model and solution method are formed. Illustrative examples highlight the feasibility and applicability of the schemes and provide references for the government in making decision with respect to the problems of coordination among the smart distribution networks, microgrids, and customers.