A robust decision framework for strategic behaviour of integrated energy service provider with embedded natural gas and power systems in day‐ahead wholesale market

Abstract

Abstract The rampant growth in penetration of gas‐fired distributed units (GFDUs) is recasting the role of the integrated energy service provider (IESP) as a price‐maker player. Nevertheless, it is threatening the well‐being and reliability of the natural gas networks (NGNs). In this regard, this paper investigates the strategic participation of integrated 20‐node NGN and an 33‐bus active distribution system (ADS) in the day‐ahead wholesale market (WM), which consists of a six‐bus transmission network (TN), through a bi‐level optimization framework. The upper‐level objective is to minimize the operational costs of the IESP as well as the cost of energy that is purchased/sold in day‐ahead WM. The lower‐level problem models the optimal response of the wholesale market operator (WMO) that has the objective of maximizing social well‐fare by clearing the day‐ahead wholesale market. To alleviate the NGN's pipeline congestion, the linepack capability of the pipelines is deployed, while demand response program (DRP) and interruptible loads (IL) are integrated into the ADS side. As a computationally efficient method, robust optimization (RO) is utilized to handle the uncertainties. The results emphasize the necessity of integrating NGN into this problem. Eventually, different case studies illustrate the impact of line pack and DRP in reducing market‐clearing price.

Keywords

• Reliability
• Optimisation techniques
• Power system management, operation and economics
• Distribution networks
• Thermal power stations and plants