Transactive energy trading among multi-microgrids in a distribution network with fair loss sharing

The rise of distributed renewable generation has made energy trading among microgrids a viable strategy for minimizing operational costs. However, existing peer-to-peer (P2P) energy trading models often overlook network constraints or use inappropriate loss-sharing methods. To address these issues, this paper introduces a model for Transactive Energy Trading (TET) among multiple microgrids within a distribution network. The proposed model incorporates network constraints and power losses, featuring a novel loss allocation algorithm that equitably distributes network losses between the Distribution System Operator (DSO) and microgrids, thus encouraging participation in energy trading. Additionally, a new pricing mechanism is introduced ensuring that all microgrids achieve equal profit-per-unit-energy, promoting fairness and active involvement in energy trading. The model is solved in a distributed manner maintaining the privacy of sensitive microgrid data while ensuring a proportional sharing of network losses. The effectiveness of the proposed TET model is validated using the IEEE 33-bus distribution network with four microgrids, demonstrating a 13.1% reduction in operational costs across all microgrids.