Optimal operation of smart distribution networks in the presence of demand response aggregators and microgrid owners: A multi follower Bi-Level approach

Abstract With utilizing the advanced automation services and communication technologies, distribution systems have been transferred from passive to smart networks. In this regard, owing to widespread and complicated interactions between varied entities, distribution system operators (DSOs) encounter various challenges in terms of energy management. Hence, in this paper, a novel Multi Follower Bi-Level framework is presented for operational scheduling of smart distribution networks (SDNs) in the presence of two players, the Demand Response Aggregator (DRA) and Microgrid Owner (MGO). In the proposed method, the upper-level problem minimizes the DSO's operating costs, while, the lower-levels maximize the MGO and DRA's profits from exchanging power. In this procedure, a non-profit agent, the Distribution-Independent System Operator is introduced to coordinate operational conflicts and interests of the network. The considered model is a non-linear Bi-Level problem which is converted into a linear Single-Level problem through KKT conditions and the Big-M method. The presented scheme is implemented on two modified SDNs. The results demonstrate that the Bi-level technique is appropriate for each entity to promote its benefit without any negative influence on the other players. Finally, to evaluate effectiveness of the proposed model, sensitivity analysis is conducted by transferring the DRA's interest to the upper-level.