Incentive-Compatible Market Clearing for a Two-Stage Integrated Electricity-Gas-Heat Market

Abstract

The establishment and development of an integrated energy market (IEM) contributes to the equitable distribution of electrical and thermal energy production resources. However, the application of conventional locational marginal price theory generally fails to promote the declaration of truthful marginal costs by market participants in the process of clearing and settlement of the IEM, which detracts from market fairness and may reduce market efficiency. Simultaneously, the continuous expansion in the scale of renewable energy sources (RESs) threatens the safe and stable operation of electrical power systems. Accordingly, the present study seeks to improve the efficiency of the IEM under large-scale RES penetration, and promote the truthful declarations of market participants by applying a Vickrey-Clarke-Groves (VCG) auction scheme to the IEM, and establishes a two-stage IEM model that promotes compatibility between the incentives of market participants to enhance market fairness. The present study also addresses the imbalance between market revenue and expenditure typically produced by the VCG auction scheme by designing an ex-post payment redistribution mechanism to ensure the equitable cost recovery of all market participants. Simulation results demonstrate that the application of the proposed VCG auction system to the IEM ensures maximum efficiency, cost recovery, and incentive compatibility as dominant strategies, and helps to integrate large-scale RES penetration with the IEM. INDEX TERMS Regional integrated energy system, integrated energy market, incentive compatibility, VCG auction, renewable energy system. NUMENCLATURE A. INDICES FIGURE 5. Periodic demand utility, system cost, and social welfare of Case 1A. FIGURE 6. Periodic demand utility, system cost, and social welfare of Case 1B. FIGURE 7. Periodic demand utility, system cost, and social welfare of Case 1C.

Developing a new framework for transactive peer‐to‐peer thermal energy market

“…The natural gas input rate limit in each time interval t is determined by Equations ( 7)- (9). The state of charge of electrical (e) and heat (h) storage units is evaluated by Equation (10), and Equation (11) ensures that the energy stored in the first time interval of the time horizon to be equal to the energy stored at the first time interval of its next day. Finally, input and output power rates and the maximum capacities of storage units are restricted in Equations ( 12)- (14).…”

“…This is because of the fact that P 3 can sell thermal energy at 5 PM and 6 PM at a higher price due to the higher electricity price, which leads to high purchasing contract prices by AB 1 consumers. One of the inherent benefits of the proposed mar-FIGURE 10 water heater generation profile [22] FIGURE 11 Thermal energy trade of P 3 ket for each prosumer is the ability to sell and purchase thermal energy for the same time interval in different iterations. This means that an agent like P 3 can sell and purchase thermal energy for the same hour at different market iterations.…”

“…In [10], a two‐stage game‐theoretic model, considering thermal comfort, is introduced to trade both heat and power between integrated energy suppliers and distributed consumers. In [11], an incentive‐compatible mechanism based on Vickrey‐Clarke‐Groves auction is applied to enhance the efficiency of integrated energy market (IEM) operations in real‐time and day‐ahead markets, considering high penetration of renewable energy sources. In [12], by considering demand elasticity and strategic providers, an integrated heat‐power distribution system's market equilibrium is obtained, running the optimal thermal flow and the optimal power flow problems for clearing heat and electricity markets, respectively.…”

Coordinated post-contingency dispatch of integrated energy system with multiple participants based on distributed energy trading

“…This paper presents a novel emergency energy market framework to coordinate the energy dispatch among different participants of IES during contingencies. To simplify the illustration, we choose a typical mode of IES which contains an electricity system, a natural gas system and a heating system as the example [21]. The electricity system, gas system and heating system of IES are managed by one ESO, GSO and HSO, respectively.…”

“…The capacities of two wind power generations and one PV arrays (WP1, WP2 and PV1) are 1.5, 1.5 and 2 MW, respectively. The hourly profiles of loads and renewable energy generation in a sample day from [21] and [14] are shown in Fig. 5 and Fig.…”