Integration of energy markets in microgrids: A double-sided auction with device-oriented bidding strategies

Highlights: • A market model for energy trading and energy management of Microgrids is described. • Device-oriented bidding strategies are presented for each device type in buildings. • PV probabilistic forecast is integrated to demonstrate market dynamics on different type days. • The utility and prosumers benefit, in addition to the added value of the ICT infrastructure are quantified. -- Abstract: Energy trading markets are one of the most viable solutions to incentivize prosumers in Microgrids. They offer the utility a versatile access for flexible loads coordination without violating the consumer privacy. In the literature, several models and designs were presented to address different aspects of energy trading markets, yet there is a gap between these models and their application in real-life. This paper describes a novel discrete-timely double-sided auction model that facilitates energy trading between prosumers in near real-time and forward markets. Since the practical realization of the model represents a crucial criterion for this model, the market is designed with fast clearing mechanism and simple bidding rules that guarantee the benefits of the prosumers, their privacy, and consider their personal preferences. Additionally, a decentralized home energy management approach is followed at the prosumer level to maximize the system reliability and enable an easy integration of multiple devices from different manufacturers. Hence, a device-oriented bidding strategy is demonstrated that considers the physical characteristics and technical limitations of each device type such as electric vehicles (EV), micro-combined heat and power systems (micro-CHP) or heat pumps. Furthermore, an open-source day-ahead probabilistic forecast for the photovoltaic systems (PV) is integrated with a bidding scheme that maximizes the prosumers commitment in the forward market. In the results, field measurements and testbeds data are used to quantify the benefits of the market model to the utility and the prosumers based on different metrics such as self-sufficiency, self-consumption, peak load and CO₂ emission reduction, and total costs. The results indicate that the market model can increase self-sufficiency and self-consumption of a microgrid while reducing the prosumer costs on average by 23%.